AFTER A FOUR-YEAR DEBATE ON ELECTRICITY REFORM, CALIfornia's powerful industry players have carved out a unique and broad new role for "scheduling coordinators." SCs have the central role in offering fully unbundled generation, transmission and retail-access services. But could these SCs, by controlling the market, also become the new monopolists?
California's highly complex scheme for markets, while said to be laissez faire, maintains several artificial constraints and market protocols that create advantages for SCs. As it is now designed, the California Power Exchange (the spot market, or PX) seems certain to have a limited role and a limited life, further reducing competition and market transparency.
Integral to the California experiment is the SC concept, which so far is unproven. SCs act for generators and consumers to schedule trading on the grid. By submitting bids to the independent system operator (who runs the transmission system), the SCs help the ISO manage line congestion. However, SCs can concentrate generation through contracting or acquisition. In this very complex market, with rules tailored for SCs, concentration of market power appears inevitable, as does market manipulation through gaming behavior.