In what is identified as the “first article of a series,” the New York Times reports that the results of power industry restructuring have disappointed many people.
A decade after competition was introduced in their industries, long-distance phone rates had fallen by half, air fares by more than a fourth and trucking rates by a fourth. But a decade after the federal government opened the business of generating electricity to competition, the market has produced no such decline.
Instead, more rate increase requests are pending now than ever before, said Jim Owen, a spokesman for the Edison Electric Institute. … The investor-owned electric utility industry published a June report entitled “Why Are Electricity Prices Increasing?�? [PDF; Link added]
I suspect any reader with much background in the industry will be disappointed with the confused reporting, and any reader without such background will just end up confused. The article jumps from California to Connecticut, from open access transmission policies to power market design issues, from wholesale industry reforms to retail industry changes, back and forth, with little evidence of any deep understanding of what is going on. Maybe as the “first article of a series,�? the intent here is mostly to raise questions that will be addressed more completely in the forthcoming articles.
Admittedly, the reporter faces a most daunting task if he seeks to tell clearly the story of the restructuring of the electric power industry. At one end the industry is buffeted by the vagaries of the world oil and gas markets and at the other end the industry is bedeviled by the storms of state and local politics. A count of all the members of Congress, federal, state, and local regulators, and state legislators having a hand in policies affecting the industry over the past ten years would easily get into the thousands. Multiply that number by a factor of hundred and you get an estimate on the number of people in the energy industry involved in promoting, implementing, or coping with the legal and regulatory changes. A tough story to tell, and so far the Times is not off to a good start.
A few specific reactions are in the continuation.