Many regulators say that new technology makes it cheaper and easier to build and operate electric generating plants. Fired by cheap natural gas, these new plants (simple- and combined-cycle combustion turbines) open the business to new players, giving a reason to deregulate electric generation ...
Inexpensive to run:
"[S]maller and more efficient gas-fired combined-cycle generation facilities can produce power on the grid at a cost ranging from 5 cents per kWh to less than 3 cents per kWh."
(em FERC, Dkt.RM95-8-000, RM94-7-001, March 29, 1995
Easy to build:
"Simple-cycle combustion turbines can be put into operation in about two years ... the cost is one-third to one-fourth less than the cost per MW of a conventional coal-fired plant."
(em Texas PUC, Dkt. 13444, April 17, 1995.
A boon to competition:
"[A]dvances in combined-cycle gas-turbine technology have exposed a gap ... Greater competition and increased customer choice ... now seem possible."
(em Mass. DPU, DPU 95-30, Aug. 16, 1995
Nevertheless, last year saw an apparent rise in natural gas prices, plus a drop in volume of natural gas sold to electric utilities for electric generation. Will regulators change their tune?
If prices rise:
"If natural gas prices were to suddenly rise ... a region or a state which has a large number of natural gas fired plants would be affected."
(em Nev. PSC, Dkt. No. 95-9022, June 28, 1996
A recognition of risk: