- Email: [email protected]
IBC - Editorial board
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Editorial Advisory Board The members of The Electricity Journal’s Editorial Advisory Board listed below have graciously agreed to assist us in identifying appropriate topics and authors for each issue,and to review articles in advance of publication when asked.We and our readers are continually enriched by their generosity, their ideas,and their critical comments. Responsibility for what appears on these pages is,however, entirely our own.
January/February 2003 Volume 16, Number 1
I
n this issue...
As we commence a new year, it is appropriate to examine the new leaf being turned over by the Federal Energy Regulatory Commission with its plan for a Standard Market Design. Does this new plan remedy the liabilities of deregulation? Or does it just comprise ‘‘several mixedup decrees’’ that fail to absorb the hard-won lessons of the recent past? We begin with a call by the American Public Power Association’s John M. Kelly for a ‘‘Missing Manifesto’’ that will challenge the vague assumptions of energy and regulatory economists about what constitutes effective competition. Next, Gary L. Hunt and Fereidoon P. Sioshansi take us on a brisk tour through the recent landscape behind
the SMD, sketching out the legal, jurisdictional and technical challenges that will make this vision difficult to attain. Addressing the highly visible issue of market manipulation, Richard J. Pierce Jr., urges policymakers to try to concentrate their efforts on structuring markets in ways that simply render undesirable behavior unprofitable, rather than constructing elaborate, coercive and punitive structures. And turning to the sticky issue of transmission pricing, John L. Seelke Jr., examining flow-based pricing of inter-regional power transfers, argues that the SMD’s proposed removal of through-and-out charges would represent a step backwards in transmission pricing policy. Instead, Seelke urges retention of through-and-out rates as the basis for parallel-path pricing.
The Electricity Journal (ISSN 1040-6190) is published monthly, except bi-monthly in January/February and August/September by Elsevier Science Inc., 655 Avenue of the Americas, New York, NY 10010. Periodicals postage paid at New York, NY, and at additional mailing offices. Postmaster: Send address changes to The Electricity Journal, Elsevier Science Inc., Customer Support, 655 Avenue of the Americas, New York, NY 10010-5107. Web site: www.electricity-online.com
Publisher Tom Clark [email protected] Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected]
# 2003 Elsevier Science Inc. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Science Inc., and the following terms and conditions apply to their use: Photocopying: Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use. Permissions may be sought directly from Elsevier Science Global Rights Department, P.O. Box 800, Oxford OX5 1DX, UK; phone: (+44) 1865 843830, fax: (+44) 1865 853333 e-mail: [email protected]. You may also contact Rights & Permissions directly through Elsevier’s home page (http://www.elsevier.com), selecting first ‘‘Customer Support,’’ then ‘‘General Information,’’ then ‘‘Permissions Query Form.’’ In the USA, users may clear permissions and make payments through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; phone: (978) 7508400, fax: (978) 7504744, and in the UK through the Copyright Licensing Agency Rapid Clearance Service (CLARCS), 90 Tottenham Court Road, London W1P 0LP, UK; phone: (+44) 171 436 5931; fax: (+44) 171 436 3986. Other countries may have a local reprographic rights agency for payments.
On other issues, Dennis L. Weisman and Johannes P. Pfeifenberger make the case for incentive regulation against opponents who claim explicit rewards should be unnecessary because utilities already are obligated to operate efficiently. Matthew A. Barmack sifts through the public bid data of the California independent system operator to draw some interesting preliminary conclusions about both market power abuse and confidentiality protections. Turning to the international scene, Tor Arnt Johnsen outlines the elements that have contributed to a relatively successful foray into retail choice in Norway. And Oana Diaconu and Michael T. Maloney lend fresh analysis to support skeptics of the viability of nuclear power in Russia.
John A. Anderson, Executive Director Electricity Consumers Resource Council
Reinier Lock, Partner Cameron McKenna LLP
Ashley C. Brown, Executive Director, Harvard Electricity Policy Group John F. Kennedy School of Government, Harvard University
J. Robert Malko, Professor Utah State University
Ralph Cavanagh, Senior Staff Attorney Natural Resources Defense Council Scott Hempling, Attorney-at-Law
RICHARD COHEN GERRY KHERMOUCH
Subscription rates: euro 79 for European countries; USD 84 for all countries except Europe and Japan (personal price). Euro 432 for European countries; USD 488 for all countries except Europe and Japan (institutional price).
Editorial office: 614-939-1704 Fax: 614-939-1705
Eric Hirst, Restructuring Consultant Oak Ridge, TN Benjamin Hobbs, Professor of Geography and Environmental Engineering The Johns Hopkins University
David Owens, Senior Vice President, Finance, Regulation and Power Supply Policy Edison Electric Institute
William Hogan, Lucius N. Littauer Professor of Public Policy and Administration John F. Kennedy School of Government, Harvard University
David Penn, Deputy Executive Director American Public Power Assn.
Edward P. Kahn, Principal Analysis Group/Economics
Derivative Works: Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage: Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Address permission requests to: Elsevier Science Global Rights Department, at the mail, fax and e-mail addresses noted above. Notice: No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made. Although all advertising material is expected to conform to ethical (medical) standards, inclusion in this publication does not constitute a guarantee or endorsement of the quality or value of such product or of the claims made of it by its manufacturer.
Henry R. Linden, Max McGraw Professor of Energy and Power Engineering Illinois Institute of Technology
PII S1040-6190(02)00421-9
PII S1040-6190(03)00004-6
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Steven A. Mitnick, Director EnergyLeader.com Margaret M. Morgan, Director, Energy Marketing PricewaterhouseCoopers
Paul L. Joskow, Elizabeth and James Killian Professor of Economics and Management Massachusetts Institute of Technology
Subscription desk: 888-437-4636 (toll free) or 212-6333730
Robert O. Marritz Editor Emeritus
Ronald E. Prater, Vice President, T&D Development Lectrix Joshua Rokach, Advisor Federal Energy Regulatory Commission Irwin M. Stelzer, Director, Regulatory Studies Hudson Institute Richard Tabors Tabors, Caramanis & Associates
Editorial Advisory Board The members of The Electricity Journal’s Editorial Advisory Board listed below have graciously agreed to assist us in identifying appropriate topics and authors for each issue,and to review articles in advance of publication when asked.We and our readers are continually enriched by their generosity, their ideas,and their critical comments. Responsibility for what appears on these pages is,however, entirely our own.
January/February 2003 Volume 16, Number 1
I
n this issue...
As we commence a new year, it is appropriate to examine the new leaf being turned over by the Federal Energy Regulatory Commission with its plan for a Standard Market Design. Does this new plan remedy the liabilities of deregulation? Or does it just comprise ‘‘several mixedup decrees’’ that fail to absorb the hard-won lessons of the recent past? We begin with a call by the American Public Power Association’s John M. Kelly for a ‘‘Missing Manifesto’’ that will challenge the vague assumptions of energy and regulatory economists about what constitutes effective competition. Next, Gary L. Hunt and Fereidoon P. Sioshansi take us on a brisk tour through the recent landscape behind
the SMD, sketching out the legal, jurisdictional and technical challenges that will make this vision difficult to attain. Addressing the highly visible issue of market manipulation, Richard J. Pierce Jr., urges policymakers to try to concentrate their efforts on structuring markets in ways that simply render undesirable behavior unprofitable, rather than constructing elaborate, coercive and punitive structures. And turning to the sticky issue of transmission pricing, John L. Seelke Jr., examining flow-based pricing of inter-regional power transfers, argues that the SMD’s proposed removal of through-and-out charges would represent a step backwards in transmission pricing policy. Instead, Seelke urges retention of through-and-out rates as the basis for parallel-path pricing.
The Electricity Journal (ISSN 1040-6190) is published monthly, except bi-monthly in January/February and August/September by Elsevier Science Inc., 655 Avenue of the Americas, New York, NY 10010. Periodicals postage paid at New York, NY, and at additional mailing offices. Postmaster: Send address changes to The Electricity Journal, Elsevier Science Inc., Customer Support, 655 Avenue of the Americas, New York, NY 10010-5107. Web site: www.electricity-online.com
Publisher Tom Clark [email protected] Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected]
# 2003 Elsevier Science Inc. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Science Inc., and the following terms and conditions apply to their use: Photocopying: Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use. Permissions may be sought directly from Elsevier Science Global Rights Department, P.O. Box 800, Oxford OX5 1DX, UK; phone: (+44) 1865 843830, fax: (+44) 1865 853333 e-mail: [email protected]. You may also contact Rights & Permissions directly through Elsevier’s home page (http://www.elsevier.com), selecting first ‘‘Customer Support,’’ then ‘‘General Information,’’ then ‘‘Permissions Query Form.’’ In the USA, users may clear permissions and make payments through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; phone: (978) 7508400, fax: (978) 7504744, and in the UK through the Copyright Licensing Agency Rapid Clearance Service (CLARCS), 90 Tottenham Court Road, London W1P 0LP, UK; phone: (+44) 171 436 5931; fax: (+44) 171 436 3986. Other countries may have a local reprographic rights agency for payments.
On other issues, Dennis L. Weisman and Johannes P. Pfeifenberger make the case for incentive regulation against opponents who claim explicit rewards should be unnecessary because utilities already are obligated to operate efficiently. Matthew A. Barmack sifts through the public bid data of the California independent system operator to draw some interesting preliminary conclusions about both market power abuse and confidentiality protections. Turning to the international scene, Tor Arnt Johnsen outlines the elements that have contributed to a relatively successful foray into retail choice in Norway. And Oana Diaconu and Michael T. Maloney lend fresh analysis to support skeptics of the viability of nuclear power in Russia.
John A. Anderson, Executive Director Electricity Consumers Resource Council
Reinier Lock, Partner Cameron McKenna LLP
Ashley C. Brown, Executive Director, Harvard Electricity Policy Group John F. Kennedy School of Government, Harvard University
J. Robert Malko, Professor Utah State University
Ralph Cavanagh, Senior Staff Attorney Natural Resources Defense Council Scott Hempling, Attorney-at-Law
RICHARD COHEN GERRY KHERMOUCH
Subscription rates: euro 79 for European countries; USD 84 for all countries except Europe and Japan (personal price). Euro 432 for European countries; USD 488 for all countries except Europe and Japan (institutional price).
Editorial office: 614-939-1704 Fax: 614-939-1705
Eric Hirst, Restructuring Consultant Oak Ridge, TN Benjamin Hobbs, Professor of Geography and Environmental Engineering The Johns Hopkins University
David Owens, Senior Vice President, Finance, Regulation and Power Supply Policy Edison Electric Institute
William Hogan, Lucius N. Littauer Professor of Public Policy and Administration John F. Kennedy School of Government, Harvard University
David Penn, Deputy Executive Director American Public Power Assn.
Edward P. Kahn, Principal Analysis Group/Economics
Derivative Works: Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage: Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Address permission requests to: Elsevier Science Global Rights Department, at the mail, fax and e-mail addresses noted above. Notice: No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made. Although all advertising material is expected to conform to ethical (medical) standards, inclusion in this publication does not constitute a guarantee or endorsement of the quality or value of such product or of the claims made of it by its manufacturer.
Henry R. Linden, Max McGraw Professor of Energy and Power Engineering Illinois Institute of Technology
PII S1040-6190(02)00421-9
PII S1040-6190(03)00004-6
| |
Steven A. Mitnick, Director EnergyLeader.com Margaret M. Morgan, Director, Energy Marketing PricewaterhouseCoopers
Paul L. Joskow, Elizabeth and James Killian Professor of Economics and Management Massachusetts Institute of Technology
Subscription desk: 888-437-4636 (toll free) or 212-6333730
Robert O. Marritz Editor Emeritus
Ronald E. Prater, Vice President, T&D Development Lectrix Joshua Rokach, Advisor Federal Energy Regulatory Commission Irwin M. Stelzer, Director, Regulatory Studies Hudson Institute Richard Tabors Tabors, Caramanis & Associates