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.

 

News Analysis

 

 

News Digest

 

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.

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.

* 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.

¥ 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.

Off Peak

February 15, 2001

Deregulation 101

 

California high school students put their education to work.

Jan. 11, 2001

Dear Secretary of Energy Richardson:

 

News Analysis