Real-time Pricing, Not Restructuring
Richard Abdoo's article, "Wisconsin Electric's View of a More Competitive Industry," (Feb. 15, 1995), brought this quote to mind: "We trained
hard. . . . But it seemed that every time we were beginning to form up into teams we would be reorganized. I was to learn later in life that we tend to meet any situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization" (Petronius (em 256 BC).
We don't need to restructure the electric industry, creating new bureaucracies while slicing and dicing the current structure. Enhanced economic efficiencies come from better pricing of the electricity flows in Mr. Abdoo's chart of the re-regulated utility framework. Too much electricity now flows without an associated price, an issue I first raised in the pages of this magazine five years ago (see "Tie Riding Freeloaders (em The True Impediment to Transmission Access," Dec. 21, 1989). Applying an appropriate price (maybe even any price) to such unscheduled flows would immediately expand the economic benefits available from the joint dispatch of generators owned by different organizations, be they utilities or independent power producers. Indeed, the Federal Energy Regulatory Commission's recent docket (No. RM94-20-000, "Alternative Power Pooling Institutions Under the Federal Power Act") favors a pricing mechanism for unscheduled power flows. WOLF (Wide Open Load Following) pricing for unscheduled flows can serve as mortar (em it not only fills the cracks, it holds the bricks together.