Publications

    Brown, Ashley. “Changes in the Electricity Industry Since the Passage of the Energy Policy Act of 1992.” In, 1994.Abstract

    EXECUTIVE SUMMARY

    The passage of the Energy Policy Act in 1992 ushered in a new competitive era in the U.S. electricity industry. The task ahead for both state and federal regulators is to make the regulatory changes that are a necessary part of these changes in the industry in a coherent fashion.

    • There is no way to achieve coherence in transmission policy without formal cooperation between federal and state regulators. Congress should urge these regulatory bodies to begin this process, in order to address issues of transmission pricing, unbundling of services, siting, access, and planning.
    • Who should bear the risks of a transition to a more competitive industry? This is clearly a question of policy, and should be treated as such. As a matter of policy, the jurisdiction which is responsible for creating stranded assets should be the one which deals with its consequences. I applaud the California and Michigan commissions for dealing with this issue explicitly as part of their proposals. The FERC has done the same in its recent NOPR, but has left unclear the issue of possible preemption of state jurisdiction.
    • Registered holding companies are currently shielded from competition by the ability to pick the regulatory forum to which they turn for decisions, and by judicial determinations which insulate self-dealing from market forces. The proposed "fix" to the Ohio Power case, now before the Congress, is a step in the right direction. However, there are still gaps and overlaps between federal and state jurisdictions that need to be addressed. In order to supervise transactions involving registered holding companies, the FERC and state PUCs need to work together. If the Congress is unwilling to codify the Pike County doctrine, it should urge the FERC to adopt it explicitly as a formal doctrine of regulatory federalism, andmake rulings that are consistent with multiple layers of jurisdiction.

    The Congress must encourage the FERC and the state commissions to exercise statesmanship on these issues, rather than continuing to engage in bureaucratic turf battles.

    Hogan, William W.A Competitive Electricity Market Model.” In, 1994. Publisher's VersionAbstract

    Excerpt from the Introduction:

    The electricity market is moving towards greater reliance on competition. Changing technology, new entrants in the generation market, and a legislative mandate to provide access to the essential transmission facility have accelerated a process of competition that will require major changes in the institutions and operations of the electricity market. Because of the special features of electricity supply, however, there are natural monopoly elements in electricity markets. Complete laissez faire competition is not desirable, and in the strictest sense would not be technically feasible. Even though increased competition appears inevitable, therefore, the specifics of how to implement an efficient competitive market are neither inevitable nor obvious. This paper outlines such a competitive market model.

    Hogan, William W.An Efficient Bilateral Market Needs a Pool. .” In, 1994. Publisher's VersionAbstract
    Excerpt from the Summary:

    The Commission through its "Blue Book" proposals has launched a process moving with breathtaking speed to completely restructure the electricity industry. The call to mark "the end of one era and the beginning of another" has been heard, and the participants are fully engaged in looking ahead and rethinking the most fundamental aspects of the structure of the market. The Commission can observe the remarkable impact of its initiative. For example, the idea of customer choice and direct access is now conventional wisdom, with the debate already having moved from policy to implementation. The focus of this hearing on the operation of the wholesale market addresses a central part of the puzzle. Here too there has been a stunning innovation. The Poolco proposals offered by San Diego and Edison mark a major break with the past of vertically integrated, cost-ofservice regulated utilities. As of yet, there is still a great deal of misunderstanding about the scope and fundamentals of this revolution. However, as the process unfolds, and if there is a serious attempt to evaluate these and competing proposals on their merits, Californians will come to appreciate that the innovations set a new world standard for both speed of development and strength of concept. The "level playing field" has become the goal of the incumbents as good policy and to avoid the cost-shifting that would otherwise occur. Faced with the requests of third parties and new entrants for true open access to the essential facilities, the strategy of the incumbents is to "just say yes."
    Brown, Ashley. “Regulatory Commissions and the Development of Competitive Wholesale Electric Markets.” In, 1994.Abstract

    The passage of the Energy Policy Act in 1992 ushered in a new competitve era in the U.S. electricity industry. The task ahead for both state and federal regulators is to make the regulatory changes that are a necessary part of these changes in a coherent fashion.

    • There is no way to achieve coherence in transmission policy without formal cooperation between federal and state regulators. The Commission should take steps to begin this collaborative process, in order to address issues of transmission pricing, unbundling of services, siting, access, and planning.
    • Who should bear the rists of a transition to a more competitive industry? This is clearly a question of policy, and should be treated as such. As a matter of policy, the jusrisdiction which is responsible for creating stranded assets should be the one which deals with its consequences. I applaud the California and Michigan commissions for dealing with this issue explicitly as part of their proposals. the FERC has done the same in its recent NOPR, but has left unclear the issue of possible preemption of state jurisdiction. 
    • The failure of Congress to codify the Pike County doctrine has created a number of regulatory difficulties which make retail competition more attractive, IRP less attractive, and potentially diminishes the richness of wholesale markets. 

    The FERC and the state commissions mist exercise the statesmanship on these issues, rather than continuing to engage in bureaucratic turf battles.

    Quirk, Sherry. “Utility Diversification. 13 May 1994. (With related documents: Levitt, Arthur: Letter to Chairman Markey, Subcommittee on Telecommunications and Finance, 17 February 1994; and Division of Investment Management Memorandum, 17 February 1994.” In, 1994.Abstract
    Quirk, Sherry, Jeanette Pablo and Montina Cole. Utility Diversification. 13 May 1994.  (With related documents: Levitt, Arthur: Letter to Chairman Markey, Subcommittee on Telecommunications and Finance, 17 February 1994; and Division of Investment Management Memorandum, 17 February 1994

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