Lynne Kiesling
My colleague Andy Kleit and I are co-editing a book on electricity restructuring in Texas:
A number of states have recently sought to increase competition in the electricity industry to drive down prices, increase supply, and improve service quality. Yet in the aftermath of the rolling blackouts and power shortages that afflicted California in 2000 and 2001, many jurisdictions have been reluctant to break with the status quo. Electricity deregulation is strewn with pitfalls, and the events in California demonstrate that chaos from poorly-designed regulatory schemes can easily result.Unlike several other states, Texas has pressed ahead with its program of deregulation. It has unbundled the production of electricity from the distribution infrastructure and from retail sales, removed controls on electricity rates, and allowed customers to switch between competitive retail electric providers. Using an innovative basket of regulatory instruments, Texas offers a distinct track record that produces important lessons for policymakers, regulators, and researchers who seek to evaluate the merits of a more competitive approach to energy policy.
Please join us on January 25 for a conference at which nine research papers investigating the impact of Texas electricity deregulation will be presented and discussed.
The other authors and I will be participating in a day-long conference to present our chapters on Friday 25 January, 2008, at the American Enterprise Institute in Washington, DC. If you are in the area and interested in electricity policy, I encourage you to attend.
"Electricity deregulation is strewn with pitfalls, and the events in California demonstrate that chaos from poorly-designed regulatory schemes can easily result."
This has to be one of the most "pregnant" sentences ever written about the CA "fiasco". The chaos in CA was the result of "poorly-designed regulatory schemes", not "electricity deregulation". Also, it was the result of abysmally poor execution of "poorly-designed regulatory schemes", from which the regulators and their agents at CAISO cannot be absolved.
Texas actually deregulated, which is more than can be said for most jurisdictions. Price caps, must serve requirements, mandatory next day bidding, etc. are "poorly-designed regulatory schemes", not deregulation.