|
Utility deregulation has the potential to bring greater customer choice among energy products and suppliers. Electricity rates could also drop, as the price of energy will be determined less by federal and state regulations and more by energy supply and demand.
Technologies
Transmission System Control
High-voltage silicon switches (thyristors) enable engineers to change the flow of electricity on the power grid much more quickly than before. This makes it possible to operate closer to the power grid's thermal limits, delivering more electricity without sacrificing reliability.
Issues
Transmission Grid Access
For competition to prevail, all power producers need open access to the power grid. Utilities that control transmission lines are now required to charge other wholesale producers the same transmission rates they charge themselves, and open access is being implemented in some retail power markets.
Electricity Reliability
A stable and reliable electricity grid is the backbone of modern society. With the electricity industry being restructured, additional demands are being placed on the grid, making it even more important to maintain reliability standards.
Power Markets
A power market is a commodity exchange where electricity is traded at prices determined by supply and demand. In addition to this spot market, there is a need for a futures market to hedge contract prices.
Public Benefits Programs
Prior to restructuring, utilities were responsible for a variety of programs — promoting energy efficiency, demand-side management, low-income assistance, consumer education, and the development and demonstration of emerging technologies such as renewable energy — that meet social objectives. Under restructuring, funding for these programs is typically through a small surcharge ("wires charge" or "system benefits charge") on utility bills.
Net Metering
Net metering allows the electric meters of customers with generating facilities to turn backwards when they are feeding power into the grid, so that they receive retail prices for the excess electricity they generate. This encourages customer investment in distributed generation, including renewable energy.
Stranded Costs
Lower electricity prices resulting from the pressure of competition reduce the ability of some utilities to recover old investments in relatively expensive generating technologies. There is uncertainty about who should pay for these stranded costs — utility shareholders, ratepayers, or both.
Renewable Energy
Sources of renewable energy are either continuously resupplied by the sun or tap inexhaustible resources. They include solar, geothermal, bioenergy, wind, and hydropower resources.
Renewable Portfolio Standard (RPS)
An RPS requires all sellers of electricity to cover a minimum percentage of their sales with electricity generated from renewable resources.
Green Power Marketing
"Green" power is electricity generated from environmentally preferable renewable sources. Industry restructuring makes it possible to sell green power in competitive electricity markets, catering to consumer preferences for cleaner energy sources.
|
