Low-cost

When Niagara Mohawk Power Corp. announced its competitive restructuring plan on October 6, 1995, it broke ranks with what had been a curiously united front against competition. The opposition had learned to genuflect before the altar of competition, but then fight doggedly to keep markets closed. This united front had implied that competition would produce largely the same impact on all utilities, but that is not true. Competition offers lucrative long-term opportunities for some utilities and potential disaster for others.

As the debate over restructuring the U.S. electricity industry moves forward, there comes a host of new theoretical models. Two proposals in particular serve well to frame the debate.

Randall Hardy

Administrator

Bonneville Power Administration

BPA's central role in the Northwest has no counterpart among the other PMAs proposed for privatization. We hold approximately 45 percent of the market share, serve 85 percent of our customers' load, and provide rate benefits for 85 percent of all Northwest residential consumers.

By contrast, the other PMAs have less than 10 percent of the market in their respective regions.

Eugene P. Coyle works as an energy analyst for Toward Utility Rate Normalization (TURN), a consumer advocacy group in California that claims 30,000 members.

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The January mini-forum failed to discuss a key underlying assumption made by PoolCo proponents. The assumption is that price competition will really exist in tomorrow's wholesale electric market.