Anticipating a second phase in the deregulation of electricity

Journal Article · Wed Jun 30 04:00:00 EDT 1999 · NRRI Quarterly Bulletin

OSTI ID:20006016

Chasek, N E

One purpose of this article is to alert state utility commissions involved in restructuring electric utilities to pay special attention to proposals that would fragment the utility's billing and metering (B and M) operations. Such fragmentation would essentially foreclose an important future option for handling all levels of retail deregulation. A fusing of B and M could become the linchpin for transitioning retail electricity from its present cost-based fixed rates to a market-based pricing regime fully exploiting the high economic efficiencies that are characteristic of most commodity pricing regimes. Realizing such economic efficiencies requires self enforcing economic discipline that makes and keeps retail pricing of electricity responsive to: imbalances in supply and demand (S and D), tensions between potential customers and competing suppliers, the need to meet a return-on-investment (ROI) objective, and the relative quality of product demanded. In the case of electricity, this means a market determined price that is also responsive to reliability and environmental issues. If these disciplines are correctly integrated, the result should be an efficient and practical market-based pricing regime.

• Research Organization: Chasek Engineering Co. (US)
• OSTI ID: 20006016
• Journal Information: NRRI Quarterly Bulletin, Journal Name: NRRI Quarterly Bulletin Journal Issue: 2 Vol. 20; ISSN NQBUEK; ISSN 8756-632X
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
COMPETITION
DEREGULATION
ELECTRIC POWER INDUSTRY
ENERGY EXPENSES
METERING
RETAIL PRICES