skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: The great ``retail wheeling`` illusion, and more productive energy futures

Abstract

This paper sets out the reasons why many environmental and public interest organizations oppose retail wheeling. Cavanagh argues that retail wheeling would destroy incentives for energy efficiency improvements and renewable energy generation--benefits that reduce long-term energy service costs to society as a whole. The current debate over the competitive restructuring of the electric power industry is critical from both economic and environmental perspectives. All attempts to introduce broad-scale retail wheeling in the United States have failed; instead, state regulators are choosing a path that emphasizes competition and choice, but acknowledges fundamental differences between wholesale and retail markets. Given the physical laws governing the movement of power over centrally controlled grids, the choice offered to customers through retail wheeling of electricity is a fiction -- a re-allocation of costs is all that is really possible. Everyone wants to be able to claim the cheapest electricity on the system; unfortunately, there is not enough to go around. By endorsing the fiction of retail wheeling for certain types of customers, regulators would be recasting the retail electricity business as a kind of commodity exchange. That would reward suppliers who could minimize near-term unit costs of electricity while simultaneously destroying incentives for many investments,more » including cost-effective energy efficiency improvements and renewable energy generation, that reduce long-term energy service costs to society as a whole. This result, which has been analogized unpersuasively to trends in telecommunications and natural gas regulation, is neither desirable nor inevitable. States should go on saying no to retail wheeling in order to be able to create something better: regulatory reforms that align utility and societal interests in pursuing a least-cost energy future. An appendix contains notes on some recent Retail Wheeling Campaigns.« less

Authors:
Publication Date:
OSTI Identifier:
55562
Resource Type:
Book
Resource Relation:
Other Information: DN: Strategic issues paper 3; PBD: 1994
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING AND POLICY; POWER DISTRIBUTION SYSTEMS; COMPETITION; ELECTRIC POWER INDUSTRY; CONSTRAINTS; ENERGY EFFICIENCY; RENEWABLE ENERGY SOURCES; FINANCIAL INCENTIVES; EVALUATION

Citation Formats

Cavanagh, R. The great ``retail wheeling`` illusion, and more productive energy futures. United States: N. p., 1994. Web.
Cavanagh, R. The great ``retail wheeling`` illusion, and more productive energy futures. United States.
Cavanagh, R. Sat . "The great ``retail wheeling`` illusion, and more productive energy futures". United States.
@article{osti_55562,
title = {The great ``retail wheeling`` illusion, and more productive energy futures},
author = {Cavanagh, R},
abstractNote = {This paper sets out the reasons why many environmental and public interest organizations oppose retail wheeling. Cavanagh argues that retail wheeling would destroy incentives for energy efficiency improvements and renewable energy generation--benefits that reduce long-term energy service costs to society as a whole. The current debate over the competitive restructuring of the electric power industry is critical from both economic and environmental perspectives. All attempts to introduce broad-scale retail wheeling in the United States have failed; instead, state regulators are choosing a path that emphasizes competition and choice, but acknowledges fundamental differences between wholesale and retail markets. Given the physical laws governing the movement of power over centrally controlled grids, the choice offered to customers through retail wheeling of electricity is a fiction -- a re-allocation of costs is all that is really possible. Everyone wants to be able to claim the cheapest electricity on the system; unfortunately, there is not enough to go around. By endorsing the fiction of retail wheeling for certain types of customers, regulators would be recasting the retail electricity business as a kind of commodity exchange. That would reward suppliers who could minimize near-term unit costs of electricity while simultaneously destroying incentives for many investments, including cost-effective energy efficiency improvements and renewable energy generation, that reduce long-term energy service costs to society as a whole. This result, which has been analogized unpersuasively to trends in telecommunications and natural gas regulation, is neither desirable nor inevitable. States should go on saying no to retail wheeling in order to be able to create something better: regulatory reforms that align utility and societal interests in pursuing a least-cost energy future. An appendix contains notes on some recent Retail Wheeling Campaigns.},
doi = {},
url = {https://www.osti.gov/biblio/55562}, journal = {},
number = ,
volume = ,
place = {United States},
year = {1994},
month = {12}
}

Book:
Other availability
Please see Document Availability for additional information on obtaining the full-text document. Library patrons may search WorldCat to identify libraries that hold this book.

Save / Share: