The data is in. Market power fails as an explanatory variable for episodes of high prices.

The past summer represented a key turning point in our understanding of deregulated wholesale power markets. Until then, it was possible to find major North American markets that lacked any experience with severe price spikes. Now that immunity is denied. Price spikes in California and other Western markets mean that the last regions bucking the trend have fallen in line.

 

The problems stem from a lack of incentives for long-term, fixed-price contracts.

The end of summer found energy regulators working overtime in California to appease an angry public that had seen electric bills double and triple in some parts of the state.

Frontlines

Federalism At Work

 

 

Excerpts from the field hearing conducted by the Federal Energy Regulatory Commission on wholesale power markets in California.

San Diego, California, Tuesday, Sept. 12, 2000, 9 a.m.

News Digest

 

Mail

NYPA's CEO clarifies details of the Power Authority's auction of nukes to Entergy.

Several comments are in order concerning the analysis by Dan Donoghue and David Haarmeyer of the pending sale of the New York Power Authority's Indian Point 3 and James A. FitzPatrick nuclear power plants to Entergy Corp. (, June 15, 2000, p. 90).

Off Peak

November 1, 2000

Customers Move On

Oracle's energy director tells Congress how new-economy firms are taking reliability concerns into their own hands.

 

1 Some utilities may question this concept. San Diego Gas & Electric argued in California's DG investigation that distributed generation does not always lead to a reduction in distribution plant investment, and that any investment savings is not kilowatt for kilowatt. And the Federal Energy Regulatory Commission has taken a more extreme position, allowing a utility to charge a fee for distributed generators delivering electricity into the distribution grid.