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Title: Harsh medicine. [retail wheeling experiment in Michigan and side effects]

Abstract

Retailing wheeling's harmful side-effects may surface in a Michigan experiment. In the final analysis, the debate over retail wheeling is about whether there will be direct price competition in the electric power industry. Retail wheeling would extend to the electric power market the same freedom of choice among customers that is present elsewhere in the economy. It would provide a mechanism through which competition could enforce an efficient allocation of resources. It also undoubtedly would eliminate most of the huge discrepancies that exist between so many neighboring service areas. It is unlikely that permitting retail wheeling would actually result in much wheeling or loss of load. Utilities will no doubt meet the threat of the loss of load by cutting rates to hold their customers. Hence, the primary effect would be on the pricing of electricity, not the wheeling of power. The retail wheeling experiment under consideration in Michigan can become an important step toward making the utility industry more efficient for the nation and more equitable for ratepayers. Unfortunately, it also is potentially unfair to the utilities involved. A retail wheeling experiment in one state is likely to put those utilities at risk for competitive attack, but is unlikelymore » to give those utilities the countervailing power to use retail wheeling elsewhere to market their power. Fairness and economic efficiency require that retail wheeling exist everywhere, and that is is accessible to utilities as well as non-utilities.« less

Authors:
Publication Date:
OSTI Identifier:
6049413
Resource Type:
Journal Article
Journal Name:
Public Utilities Fortnightly; (United States)
Additional Journal Information:
Journal Volume: 131:14; Journal ID: ISSN 0033-3808
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY AND ECONOMY; COMPETITION; ECONOMIC ANALYSIS; ELECTRIC UTILITIES; FORECASTING; INVESTMENT; LEGAL ASPECTS; MICHIGAN; RETAIL PRICES; RETAILERS; COMMERCIAL SECTOR; DEVELOPED COUNTRIES; ECONOMICS; MARKETERS; NORTH AMERICA; PRICES; PUBLIC UTILITIES; USA; 296000* - Energy Planning & Policy- Electric Power

Citation Formats

Studness, C M. Harsh medicine. [retail wheeling experiment in Michigan and side effects]. United States: N. p., 1993. Web.
Studness, C M. Harsh medicine. [retail wheeling experiment in Michigan and side effects]. United States.
Studness, C M. Thu . "Harsh medicine. [retail wheeling experiment in Michigan and side effects]". United States.
@article{osti_6049413,
title = {Harsh medicine. [retail wheeling experiment in Michigan and side effects]},
author = {Studness, C M},
abstractNote = {Retailing wheeling's harmful side-effects may surface in a Michigan experiment. In the final analysis, the debate over retail wheeling is about whether there will be direct price competition in the electric power industry. Retail wheeling would extend to the electric power market the same freedom of choice among customers that is present elsewhere in the economy. It would provide a mechanism through which competition could enforce an efficient allocation of resources. It also undoubtedly would eliminate most of the huge discrepancies that exist between so many neighboring service areas. It is unlikely that permitting retail wheeling would actually result in much wheeling or loss of load. Utilities will no doubt meet the threat of the loss of load by cutting rates to hold their customers. Hence, the primary effect would be on the pricing of electricity, not the wheeling of power. The retail wheeling experiment under consideration in Michigan can become an important step toward making the utility industry more efficient for the nation and more equitable for ratepayers. Unfortunately, it also is potentially unfair to the utilities involved. A retail wheeling experiment in one state is likely to put those utilities at risk for competitive attack, but is unlikely to give those utilities the countervailing power to use retail wheeling elsewhere to market their power. Fairness and economic efficiency require that retail wheeling exist everywhere, and that is is accessible to utilities as well as non-utilities.},
doi = {},
url = {https://www.osti.gov/biblio/6049413}, journal = {Public Utilities Fortnightly; (United States)},
issn = {0033-3808},
number = ,
volume = 131:14,
place = {United States},
year = {1993},
month = {7}
}