Courts and commissions: Does bidding save money in a buyer's market
With stable fuel prices and slow growth in demand, a buyer's market reigns in some places for electricity. Surprisingly, state regulators are struggling to bring the benefits to ratepayers. Some are saying that structured competitive-bidding programs and [open quotes]Request for Proposal[close quotes] (RFP) procedures are standing in the way. Mandatory competitive-bidding programs for electric utility procurement of purchased power are a regulatory fixture in many states. Regulators often cite two major goals in support of such programs: (1) to encourage utilities to seek the cheapest power to meet customer demand as a part of broader least-cost planning rules, and (2) to foster development of the nonutility generator (NUG) industry (often with special emphasis on facilities that use renewable resources) by providing a consistent and secure market for NUG power. But regulators from Massachusetts to California are finding that the two goals can conflict, especially where there is plenty of inexpensive supply on the short-term market. The strict bidding schemes for purchased power sometimes prevent a utility from fully exploiting lower-cost supplies once the bidding is complete.
- OSTI ID:
- 7245138
- Journal Information:
- Fortnightly; (United States), Journal Name: Fortnightly; (United States) Vol. 132:7; ISSN FRTNE8
- Country of Publication:
- United States
- Language:
- English
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