Posted at http://www.platts.com/Magazines/POWER/Power%20News/2004/061004_1.xml
POWER - 06/10/04
After the lights went out for more than 50 million people across the Midwest and Northeast last August, many observers said the push for restructured, competitive wholesale electricity markets may have blacked out as well. Utilities across the country were already embracing a "back-to-basics" business model, while many formerly high-flying energy merchants struggled to stay solvent.
For many, the blackout completed a trilogy that seemed to spell the end of restructured markets, following the disastrous California energy crisis and the sudden demise of Enron, which cast the whole competitive ethos in a bad light.
But for Federal Energy Regulatory Commission Chairman Pat Wood, the Aug. 14 outage occasioned a revelation: Competitive wholesale markets not only have the ability to save customers money, they are also necessary to improve reliability and prevent large-scale blackouts from happening in the first place.
Reliability, more than just economic efficiency, is the real reason to move forward with competitive markets, Wood said in a recent interview. "I think there's a real reason why we need to get there," he said. "It's not just about the economic efficiency and ivory tower [theories], it's reliability and keeping the lights on.
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