An efficient electricity market: Using a pool to support real competition

Journal Article · Thu Sep 01 04:00:00 EDT 1994 · Electricity Journal

DOI:https://doi.org/10.1016/1040-6190(94)90304-2· OSTI ID:35601

Garber, D ^[1]; Hogan, B; Ruff, L

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1. San Diego Gas & Electric Co., CA (United States)

A pool-based market can reduce the costs of electricity by increasing competition in those parts of the electricity system where market forces can be effective and efficient - including direct access - while regulatory attention focuses on the remaining monopoly parts of the industry and on environmental and social goals that competitive markets cannot be expected to handle. This is a position put forward for consideration by San Diego Gas and Electric Co. (SDG&E). Although SDG&E is confident that an efficient, competitive electricity market can be developed, doing so is inherently difficult in practice and even in theory. Indeed, a major justification for treating electricity supply as a monopoly has been the impossibility of coordinating the actions of competitors by using prices to match supply to demand instantaneously at each of hundreds of locations, as required on an interconnected electricity grid. Recent advances in information technology make it practical not to use competitive markets much more extensively in managing an electricity system, but only by carefully integrating market processes into the still-essential central control and coordination functions. A pool-based wholesale electricity market is complex, not because a pool makes it so, but because a pool recognizes and deals with the real complexities of an electricity system.

• OSTI ID: 35601
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 7 Vol. 7; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
CALIFORNIA
COMPETITION
DEREGULATION
ELECTRIC POWER INDUSTRY
MARKETING
POWER POOLING