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A Monopolist Takeover

Dominion and AEP want to put the toothpaste back in the tube, but re-regulation could get messy.

Fortnightly Magazine - March 2007

demand; 2) new capacity encouraged through market forces; 3) market entry and exit determined by market forces; 4) consumer ability to hedge future prices with long-term bilateral contracts; 5) adequate transmission infrastructure; 6) mitigated market power; and 7) relaxed wholesale price caps and bid-mitigation measures.

The ELCON president asserted that what we have today is not true competition but rather a new form of regulation—indeed, something worse than traditional regulation. Perhaps it is ELCON’s view that has set in motion hearings on electric competition at the Federal Energy Regulatory Commission (FERC).

Last December, FERC Chairman Joseph T. Kelliher announced a series of conferences (the first hearing was two weeks ago). These meetings are exploring a range of issues, including federal-state cooperation, the need for new infrastructure, demand response and renewable energy, the availability of long-term contracts, and market-design issues affecting wholesale markets. The commission also is addressing the challenges faced by all wholesale markets, including organized markets and bilateral contract markets.

In short, FERC plans to address nearly everything that C&I customers want to see improved.

Should they be satisfied with the changes, AEP and Dominion may again have to squeeze the toothpaste.