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Power Markets Disconnected? How to Reconcile Retail with Wholesale

Fortnightly Magazine - September 15 1999

paradigms were equal, then this shift in responsibility for transmission service would penalize customers with lower load factors.

There is no reason to have intra-regional transmission service delivered by anyone other than the local distribution utility. Although state commissions may want to keep the option open to the supplier to purchase its own transmission service, it should be at the supplier's option. Utilities should be required to provide this service, as well as billing and collection of associated revenues. That eliminates the transfer of unrelated business risks from the utility to the supplier and eliminates complexities where subtle savings and losses are associated with these transactions because of the mismatch between the wholesale and retail tariff. It also keeps this service where customers expect it to be.

David Magnus Boonin is president of the Philadelphia consulting firm that bears his name. The firm focuses on strategic decisions and implementation protocols in deregulated energy markets. Until recently, Boonin was an executive vice president for NewEnergy Inc., then known as New Energy Ventures. He is former chief economist for the Pennsylvania Public Utility Commission.

Stephen R. Fernands, author of the PJM section of this article, is president of Customized Energy Solutions and provides economic analysis for utilities, marketers and end-users entering deregulated markets. He also is a consultant to NewEnergy Inc.

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