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Fortnightly Magazine - January 15 1998


"The MDCS Report has focused on the customer-to-supplier data flow needs. This one-way approach ignores the customers' need to real-time energy pricing information to make real-time energy pricing work¼ This issue was raised at the workshop but is omitted in the report. A real-time energy market depends on real-time pricing."

Granted, the ISO and PX were created in part to supply real-time pricing. But at some point, the focus seemed to shift to cost recovery. You can bet that the software now being tested by the PX and ISO relates to how utilities and suppliers will be compensated for one cost or another. And those costs remain directly attributable to the system we've already got - a system built on regulation and founded on bean counting.

Now we propose to introduce competition and look what happens: We delay because we're afraid that the bean counting isn't working just right.

• • •

Note: In my December column, I quoted some of the open discussion from the sixth meeting of the Department of Energy's Task Force on Electric System Reliability, held in Washington, D.C., on Nov. 6. Soon after, I received this response from the chairman of the task force, former congressman Philip R. Sharp.

Bruce Radford's editorial in the December 1997 issue ("Grid & Bare It," p. 4) suggests that the secretary of energy's task force dealing with reliability issues is flawed because it represents such diversity of opinion that no real recommendations can emerge.

First, I believe the secretary was wise in appointing such a diverse group; and second, the task force already has provided the secretary with specific recommendations that I hope will be viewed as valuable.

The diversity, of course, will help to assure policymakers that any recommendations reflect more than just a few interests and, therefore, are less likely to meet with crippling opposition. It certainly would be easier to make policy if you only had to deal with "your own kind" and could exclude from participation divergent opinion. That approach had a certain appeal for the Soviets. It is notoriously ineffective in western democracies.

Mr. Radford failed to mention that the very meeting he attended produced a specific set of recommendations regarding the institutional framework through which reliability standards should be made and implemented in a competitive marketplace. Our goals were to capitalize on private sector expertise, to provide a legal basis for making the rules universally mandatory, to allow for regional diversity in the market and for the evolution of business institutions and practices, and to recognize that the grid operates across national boundaries.

Thus far, the task force's proposed framework has won acceptance in many circles. The task force welcomes the input of knowledgeable people; and we anticipate providing the secretary recommendations on several additional issues.

The Fortnightly may wish to provide its readers with information about these recommendations.

Philip R. Sharp


Task Force on Electric System Reliability

Secretary of Energy Advisory Board

(And former chairman, Energy and Power Subcommittee, House Committee on Energy and Commerce, 1981-95.)


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