Electric Markets Research Foundation Releases Initial Report Examining Traditional and Restructured Electricity Markets

Next Report to Compare Ways of Ensuring Adequate Electricity Supplies

WASHINGTON, Oct. 10, 2013 /PRNewswire-USNewswire/ -- The Electric Markets Research Foundation today released a report by Navigant Consulting, Inc. comparing the development of traditionally regulated electricity markets with more recent restructured power markets often accompanied by retail customer choice.

"Despite the long-standing market-versus-regulation debate, there has been remarkably little independent investigation of the key issues critical to understanding the nation's two distinctive different electricity systems," said Bruce Edelston, the foundation's president. "This independent report by Navigant, the first in a series of planned research papers, is designed to help fill that void."     

The report, "Evolution of the Electric Industry Structure in the U.S. and Resulting Issues," examines how electric utility regulation has evolved and why centralized markets developed in the Northeast, the Mid-Atlantic region, much of the Midwest, Texas and California but not in others, especially the Southeast, most of the Southwest and parts of the Midwest and West.

Also, the report provides an overview of the history of regulation and competition in the power industry, from the foundations of regulation in early U.S. Supreme Court history through key statutory developments, including the Federal Power Act and the Public Utility Holding Company Act, to restructuring in many regions and the Federal Energy Regulatory Commission's Order 1000. It also studies how and why the two broad electricity market structures developed and identifies issues encountered in both  approaches that could be addressed in future EMRF research projects.

Among the specific issues addressed by the Navigant report are how:

• Each of the two retail and wholesale market structures works to ensure system reliability
• Environmental requirements are addressed
• Risks are allocated among generator, utilities, and customers
• Planning is done
• The two approaches address issues of regulatory jurisdiction

The report is meant to educate and define issues rather than to draw conclusions.

One key area of difference identified in the Navigant report is how each power market structure ensures the planning and construction of sufficient generating capacity for utility customers. EMRF has selected this issue for its first detailed review after the Navigant study because policy makers and regulators across the country are increasingly concerned about generation adequacy in both centralized markets with regional transmission organizations and regulated markets with vertically integrated utilities.

The Foundation has issued an RFP to fund an independent expert to conduct research on this issue. For copies of the RFP, as well as further information about the Foundation, please go to www.emrf.net.

EMRF is an independent non-profit research organization formed to examine issues surrounding the operation of alternative electric industry market structures and how they are affected by public policy.

SOURCE Electric Markets Research Foundation