Please read the active discussions on the business case for true electric market deregulation, going on on Energy Pulse, and join them with your knowledge of the electricity industry.
Within yesterday and today, I have added two more comments to the active discussion on Energy Bill 2005 - A Waste of Time?
1st comment
Mark,
As a complement to my other comments, you can see that the technology is available to eliminate price controls in electricity. Utilities business models have perversed incentives to increase volume sold which affect efficient use of electricity, while retailers need to innovate (incorporating energy efficiency for example) to compete with other retailers. The regulators need not negotiate prices for the customers anymore. It has been known for a long time that utilities #1 business is to win cases to the regulator. Independent retailers competing with other retailers will make municipal utilities more efficient under complete (true) deregulation. Read Spot Pricing of Electricity of Fred C. Schweppe (1988) for an introduction, but introduce competing retailers (instead of the utility) and the simple value chain, with wires monopolies charging a toll for their services.
2nd comment
If electricity were just a simple commodity, I would think what Len proposes would work. However, electricity is more than a commodity, which means that an intermediary with an innovative business model is needed to participate in the wholesale and retail markets. The missing element as Len admits is tha basic reliability control purposes. Competitive retail marketing is an essential function required to bridge such reliability element.
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