Originally developed to compensate U.S. electric utilities for regulatory assets rendered uneconomic by deregulation, so-called “stranded-cost” securitization techniques are finding new...
AMERICANS ARE fascinated with lists. There are lists of just about anything you can name, from the Fortune 500 to baseball batting averages. There's even a book of lists. We especially like to rank "top tens," like the 10 best cities to live in or the 10 worst school districts in America. Television has popularized these lists. One thinks immediately of David Letterman, of course, but back in the '50s there was a black-and-white TV show, "Your Hit Parade." It presented the top 10 hit songs for the week, performed by singers like Gisele MacKenzie and Snooky Lanson (em inspiration for countless top 40, top 50, or top 100 lists by contemporary radio disk jockeys (em perhaps even for Mr. Letterman.
And for at least one engineer who is just a little concerned about reliable electric service.
So here, with apologies to Gisele, Snooky, Dave, et al., are my own "Top Ten Myths About Electric Power Deregulation."
A Drum Roll, Please
MYTH #10: WE ARE WITNESSING DEREGULATION OF ELECTRIC POWER SUPPLY IN THE U.S. Reality: Some deregulation of the generation or supply side of the utility industry is occurring, but so is massive new regulation of other aspects of electric power. In transmission, regulation is intruding to a degree unprecedented in the 115-year history of electric supply in the U.S. Moreover, in reliability and its assurance, and in the very institutions of the industry, federal regulation has already taken over, or is being delayed only by debates over "how" (not over "whether"). Indeed, thousands of pages of new regulations now fill corporate libraries and congressional offices, providing lucrative employment for both attorneys and consultants, not to mention Washington bureaucrats.
MYTH #9: ELECTRICITY IS JUST ANOTHER COMMODITY, LIKE GAS, OIL OR PORK BELLIES. Reality: "Electricity is not a commodity; it's a phenomenon." This statement, made by an unidentified state commissioner, was quoted by Bruce Radford in a Public Utilities Fortnightly editorial a few years ago. I don't know its source, and he won't reveal it, but it's one of the best characterizations of electricity I've ever heard. It perfectly sums up the fundamental difference between electricity and other so-called commodities. Electricity is difficult, really impossible, to visualize. I can hold a pound of coal, or a 16-ounce jar of oil or gas, in my hand. A few of us could hold a pork belly. But no one I know could hold a kilowatt-hour of electricity. That's because, no matter what the economists say, electricity is different; it's an abstraction. Or, as our wise but unknown commissioner said, it's a "phenomenon." (Who was that masked man, anyway? I don't know, but I wanted to thank him!)
Of course, I could say, "I am electricity," since it's the electromagnetic force that holds the atoms of my body together (yours, too), and electricity makes my brain (such as it is) and nervous system work. As Walt Whitman said in Leaves of Grass, "I sing the body electric." He wrote that long before Order 888.
MYTH #8: THE MARKET WILL TAKE CARE OF RELIABILITY. (If you really