GF survey reveals absurd anomalies of IOU thinking

The decline in electric reliability illustrated by last August's blackout is due in part to the effects of competition, a poll of industry executives found.
     Yet despite the difficulties to date, survey respondents favored staying the course on deregulation by about a 2-1 majority.
     Hmmmm.
     Over half of the US survey respondents believe reliability is declining and 60% of that group blamed competition rather than voluntary NERC rules that are to some extent being ignored.
     That's quite an accomplishment considering the wholesale grid is only open about 15% and retail markets are open in almost all states on a let's-pretend basis.
     GF Energy's 2004 Electricity Outlook sees competition's dirty work ramping up pressure for tougher regulation.
     The battle royal over FERC vs NERC as regulator in the US and Canada nevertheless, leads to optimism among North American utility leaders for a classic business model -- the regulated utility.
     Roger Gale, who founded the Washington International Energy Group, began doing the January survey long ago.
     One solid and valuable finding is that "transmission is the emerging business focus" and "more money will be spent on transmission than on anything else. It's where the most money will be made.
     "After being the backwater for decades the transmission world is now the leading edge of the industry," Gale predicted.
     Should RTO membership be voluntary or mandatory?
     Respondents were evenly divided reflecting geography and a divide between those wanting to get wholesale markets going and those who discourage markets as a threat to monopoly.
     The industry that responded believes FERC SMD action is dead for now while a quarter feel SMD will never be implemented.
     Yet half expect it to take at least four years for implementation.
     Rebuilding confidence in power leadership is the most important priority for 2004 for about one-third of respondents.
     The 2004 Electricity Outlook was based on a telephone survey of senior industry leaders, over half of whom were at the president and CEO level.
     Seventy-two executives completed the survey out of a starting sample of 128 -- 56% response -- was far above the 10-15% in previous years.
     For more data -- inquiries@gfenergy.com.  (Story originally published in Restructuring Today 1/14/04)

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