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To: Cynic 2005 who wrote (54156)	1/4/2001 2:42:00 PM
From: yard_man	Read Replies (1) \| Respond to of 436258

very close to 3), IMO. Utlities are a different matter, though. There has been this regulatory "compact" thing. The problem is how to move to a competitive model and whether or not that is best ... telecom, I'd say no doubt about it -- real competition is best, but the electric grid is different in some ways. Here we have a fairly competitive wholesale market -- letting a residential customer choose their supplier probably won't result in any more efficiencies ... Right now the deregulation model is: Distribution and transmission are partly if not totally "natural" monopolies and need to continue to be regulated and generation is not and should therefore be deregulated, but it is very difficult to separate the two when the US grid is really like 3 big machines -- generators can compete only to the extent that there aren't transmission bottlenecks. What I don't understand is how you can treat one as competitive and the other one as not and expect market forces to allocate efficiently between the two -- Right now in the wholesale market it seems to me we have a system that is a lot like "swaps" -- contract paths are a complete fiction -- unless network flow is incorporated in the financial deals, no way can transmission/generation allocative efficiency be reached ...

To: Cynic 2005 who wrote (54156)	1/4/2001 2:43:51 PM
From: yard_man	Respond to of 436258

very close to 3), IMO. Utlities are a different matter, though. There has been this regulatory "compact" thing. The problem is how to move to a competitive model and whether or not that is best ... telecom, I'd say no doubt about it -- real competition is best, but the electric grid is different in some ways. Here we have a fairly competitive wholesale market -- letting a residential customer choose their supplier probably won't result in any more efficiencies ... Right now the deregulation model is: Distribution and transmission are partly if not totally "natural" monopolies and need to continue to be regulated and generation is not and should therefore be deregulated, but it is very difficult to separate the two when the US grid is really like 3 big machines -- generators can compete only to the extent that there aren't transmission bottlenecks. What I don't understand is how you can treat one as competitive and the other one as not and expect market forces to allocate efficiently between the two -- Right now in the wholesale market it seems to me we have a system that is a lot like "swaps" -- contract paths are a complete fiction -- unless network flow is incorporated in the financial deals, no way can transmission/generation allocative efficiency be reached ...