The larger companies are winning more business. But how will
they fit into a restructured industry?
Put 45 energy service companies (ESCos) into a $1-billion market, and they...
can New England consumers stand by quietly when the electric industry says, "Based on an MIT analysis . . . the load peaks in New England this summer will necessitate interrupting the supply of electricity to some customers"?
Marija Ilic' is right that reliability will become more complex under deregulation; she is wrong that engineered solutions are the answer. The solution should allow market forces to ensure reliability. Dozens of utility studies, including several I directed at Pacific Gas & Electric, have shown that customers respond enthusiastically to price changes by dropping load. What is missing from the restructuring debate is recognition of the importance of these price signals both for reliability and for the associated need for time-differentiated power metering that encourages consumers to reduce peak load and enables them to benefit from their actions.
Ilic''s closing comment about small-scale distributed generation will, I predict, be implemented through demand-side resources rather than complex, difficult-to-coordinate, distributed supply-side resources. For example, one steel mill in Yorkshire, England, earned more profit in 1995 from providing demand-side load reductions during critical peak periods than it earned in its mainline steel business! Ilic's conceptual solution is right, but the market, not complex engineering, is the right mechanism.
Chris S. King
CellNet Data Systems, Inc.
New York's Timetable
I was surprised that the news item "N.Y. Issues Electric Restructuring Plan" (Courts and Commissions, 7/15/96, p. 45) neglected to mention one of the most significant aspects of the restructuring order at the New York Public Service Commission (PSC). In its May 20th order, it adopted the goal of wholesale competition by early 1997, and retail access by early 1998.
As the PSC stated: "A main benefit of setting a timetable is that it would give parties a goal and expectation that should move the process along. It also provides industrial and commercial customers an incentive to invest based on an expectation of retail choice and not seek ways to avoid the system through bypass or moving operations out of state."
In their Recommended Decision, the PSC's administrative law judges had not included a timetable. Many parties, representing all customer classes, urged the PSC to adopt the timetable that was included in the final order. That schedule should expedite the transition to a competitive electric industry in New York State.
Barbara S. Brenner, Esq.
Couch, White, Brenner, Howard & Feigenbaum, LLP
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