The Nation's Electric Power Industry-What's Next?
By Steve Kiesner Director of National Accounts, Edison Electric Institute | October 28, 2008
In the late '90s, enthusiasm for electricity competition was sweeping the nation. Twenty-three states and the District of Columbia had opened their retail electricity markets to competition or were planning to do so. Several other states were planning to follow suit.
Then came the California electricity crisis. Competition took the rap, but a flawed market design, compounded by an inadequate number of power plants and transmission wires, was the real bad guy behind the news making power shortages and exorbitant energy contracts. After all was said and done, many states were thinking twice about whether or not they should open up their market to competition.
This past January, however, Texas, as Texas often does, pushed ahead with its own vision of how a state should restructure its retail electricity market. Texas put together a market that it believes will avoid the problems that plagued California and deliver more choices and lower prices for consumers and businesses alike. The early results are positive. Other states are now eyeing the Texas experiment to see if it might be safe to get back into the competitive waters again.
Unrelated to electricity competition, but just as newsworthy, was the Enron collapse. The energy giant's trading schemes and accounting practices have dominated the headlines this year. Concern over Enron's bankruptcy has undermined investor confidence in the nation's energy industry. A number of companies, especially energy traders, are now regrouping and trying to win back consumer and investor confidence.
With these events serving as a backdrop, the U.S. Congress is now defining a national energy policy. The House and the Senate have each worked out their own vision for the country's energy future. Improving energy security, along with consumer and environmental protection, is paramount. A Congressional conference is expected to be held this summer to reach agreement on a final bill. However, the two bills differ in many ways and an agreement could take some time.