More than a decade ago, at the 1981 Edison Electric Institute (EEI) Fall Financial Conference in Palm Beach, FL, I presented my vision of the future of the electric industry. I called my talk "Let's End the Monopoly." In it I urged, "Let's open electricity generation to competition (em with free entry, no franchises, and no obligation to serve." The response was underwhelming.
From the perspective of the last 14 years, how have my forecasts turned out? As with most predictions of the future, the answer is mixed: Some forecasts proved right, some went wrong, and some are yet to be verified.
"Right" on Generation
In the "right" category, free-market competition at the generation level has become a reality for new generation in the United States and for all generation in much of the rest of the world. And the first wave of distribution companies are now shopping around among competitive suppliers. Ironically, the first wave consists of municipals and cooperatives (em not spinoffs from integrated electric utilities. But I still believe that will come soon.
I envisioned regional transmission systems back in 1981. While I still believe that RTGs (regional transmission groups) are the first step, regional transmission probably belongs in the "yet to be determined" category. But back then, my focus on regional transmission was driven by three factors:
s the economics inherent in wide-scale dispatch
s concern over the maximum manageable size of the dispatch system
s a desire for open access through "postage stamp" rates within the region.
Today, those factors still exist, but concern has also sprung up over fair and efficient pricing of transmission services.