Deregulating Retail Energy Services: First and Subsequent Steps

Fortnightly Magazine - May 1 1996
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One popular model in electric utility restructuring assumes a fully competitive merchant segment providing retail energy services. These "retail energy service companies," or RESCOs, would offer services described as heating, cooling, ventilation, lighting, drive power, information, and communications. Within such services lie such separate components as electricity, energy efficiency, load management, gas, equipment, and management.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This "RESCO Plan" would include a fully

competitive electric generation function, and fully regulated monopolies for electric transmission, distribution, and system reliability. It would deregulate the process of acquiring the generation and load-reduction services by customers. More important, the RESCO Plan would retain mechanisms to achieve societal objectives such as universal service, low-income programs, cleaner air and water, greater energy efficiency, and increased use of renewable energy. It offers regulatory mechanisms for identifying and supporting societal objectives that the market alone does not attain.

Proponents have introduced a RESCO Plan in at least five states: California, New York, Wisconsin, Illinois, and Ohio. This paper explains how the plan was introduced in those states and focuses on movement toward a RESCO Plan in the first three states on that list: California, New York, and Wisconsin.

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