Power in 21st century: Progress or gridlock?

Journal Article · Wed Oct 01 04:00:00 EDT 1997 · Forum for Applied Research and Public Policy

OSTI ID:530484

Flaim, T A ^[1]; Hemphill, R C ^[2]

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1. Niagara Mohawk Power Corp., Syracuse, NY (United States)
2. AXS Marketing, Baldwinsville, NY (United States)

Residential customers want price concessions, environmental groups desire investments in renewable energy, and utilities wish to protect their assets and maximize their profits. {open_quotes}Are these conflicting objectives attainable and sustainable as markets are opened to competition?{close_quotes} {open_quotes}Not in New York,{close_quotes} say Theresa A. Flaim, vice president of corporate strategic planning at Niagara Mowhawk Power Company in Syracuse, New York, and Ross C. Hemphill, former director of resource strategies at Niagara Mohawk. One reason is the Public Utility Regulatory Policies Act of 1978, which locked utilities into long-term contracts to purchase electricity. When prices fell, these companies were left with costs that far exceeded current market prices for the goods and services that they needed. Utility experts have labeled these {open_quotes}stranded costs.{close_quotes} {open_quotes}While most people believe that nuclear power plants are the prime cause of stranded costs for Niagara Mohawk, the root of the problem lies with contracts signed with independent power producers,{close_quotes} the authors say. If New York utilities are saddled with these costs, they would have little time to restructure, the authors warn, since they {open_quotes}would find themselves...spending the next five years or so arguing their cases in federal bankruptcy court.{close_quotes} However bumpy the transition to a competitive environment may be, Flaim and Hemphill believe the process is well worth the effort because it ultimately will lead to lower prices for consumers.

• OSTI ID: 530484
• Journal Information: Forum for Applied Research and Public Policy, Journal Name: Forum for Applied Research and Public Policy Journal Issue: 2 Vol. 12; ISSN FARPEL; ISSN 0887-8218
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
DEREGULATION
ELECTRIC POWER INDUSTRY
SOCIO-ECONOMIC FACTORS