FERC's Santa on "New Power Industry"

Fortnightly Magazine - March 1 1995
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Commissioner Donald F. Santa, Jr., offered the Federal Energy Regulatory Commission's (FERC's) view of the "New Power Industry" at the 3rd annual electricity conference sponsored by the Western Energy and Communications Association and the Los Angeles Power Producers Association in Irvine, CA. Santa acknowledged current trends toward disaggregation, but said he doubted that a single, uniform, nationwide industry structure would emerge. Instead, he predicted some variations dictated by the unique characteristics of regional markets, such as the health of the area's economy, competitiveness of the incumbent electric industry, and differences among state regulatory policies. Santa added that regional transmission groups could take the lead in developing regional approaches to industry restructuring. Santa characterized the new power industry as the product of disparate forces including federal and state regulation, consumer preference, and technological change. Advances in gas turbine technology have dramatically changed the economics of power production, a point "captured quite well," he said, in a recent article by Charles Bayless of Tucson Electric Co. (see Public Utilities Fortnightly, 12/1/94, p. 21). Santa agrees with Bayless that technological innovation will not stop with gas turbines, and that the commercialization of technologies such as fuel cells and micro-cogeneration might cause a further devolution away from large, central station power plants.

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