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Fortnightly Magazine - March 1 2001

Price-Responsive Retail Demand: Key to Competitive Electricity Markets

Wholesale and retail are two different worlds, and therein lies trouble and opportunity.

* All four of the operational independent system operators (ISOs) in the United States experience market-power problems when demand is high (typically during the summer). As a consequence, the four ISOs impose price or bid caps on the participating generators. A robust demand side that participated in bulk-power markets might obviate the need for such caps.

Byline: 
Eric Hirst
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Electricity Choice: Pick Your Poison

A. Errant Economics? B. Lousy Law? C. Market Manipulation? D. All Three?

1 "An Open Letter to Members of the U.S. House and Senate Conference Committee About National Electric Power Transmission Policy from a Group of Concerned Engineers,", Oct. 1, 1992, pg. 15.

2 Dr. Eugene Coyle, Price Discrimination, Electric Redlining, and Price Fixing in Deregulated Electric Power, , January 2000, p. 7, 8.

3 J.M. Keynes, "The End of Laissez-faire" in , London, The Macmillan Press, 1972, p. 284 .

4 Ibid., pg. 35.

Byline: 
J.A. Casazza
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Entergy's Grid Grab

Will tomorrow's transmission be privately funded, with the first-class seats reserved for investors?

The six o'clock news has locked its radar on California's power market meltdown, and rightly so. But that's no reason to overlook the nation's heartland, where a utility coming late to the game has set the pot boiling.

Byline: 

Bruce W. Radford

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News Analysis

Fuel costs drive electric prices, but generators seem perfectly willing to pay a premium for fuel when they're getting top dollar for power.

 

News Analysis

 



 

Byline: 
Carl J. Levesque
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Off Peak

Regulators face tough choices, but find a way to straddle the issue.<b> </b>

Pay Now? utilities would pass along the higher prices all at a clip, leveling the books, but throwing customers into severe rate shock.

or Pay Later? utilities would defer the charges over months or even a year, to keep bills stable for ratepayers, but at the risk that some customers would end up paying for gas they never bought in the first place.

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Dancing With Goliath: Prospects After the Breakup of Ontario Hydro

How market power likely will emerge, despite the government's good intentions.

¥ CUSTOMBid is a product of Mellowmede Ltd., developed in consultation with the staff of London Economics International LLC. London Economics International LLC is an exclusive licensee of CUSTOMBid.

# "Cournot competition" refers to an oligopoly in which each firm believes that its rivals are committed to a certain level of production and that rivals will reduce their prices as needed to sell that amount.

Byline: 
A.J. Goulding, Julia Frayer, and Nazli Z. Uludere
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