Public Power - September/October 2007 - (Page 46)

Now What? tion in the electric industry is always asked as if true competition were in place. That’s not the case. If you had true or genuine competition, in the antitrust sense, then competition might produce a better result, but that’s not the way it works.” The attraction to market power is inherent,” she says. A competitive supplier’s drive is always for greater market share, and to dominate competition.” What’s ahead—It is not clear where we will end up on the divergent paths now emerging. “Definitive analysis on the results of competitive markets has not been done yet, but there is enough data and experience for states to make decisions. Each state, each region, needs to decide where it wants to go over the next 10 years,” says Showalter. Hogan believes such an approach may be courting disaster and places responsibility squarely on FERC to take action. If markets can’t function properly for electricity, he reasons, then the old model of monopoly and regulation may be the best choice. But too much happened since enactment of the 1992 Energy Policy Act. It would be both difficult and expensive to go back, and the delay would create more crises. “The rules are in turmoil and market institutions are fragile. The ostrich strategy is an invitation to continued surprises and this should be no surprise,” he says. He suggests the industry treat the costs of mistakes as the sunk costs of an expensive education and put good markets in place. This requires “leadership by regulators, in Washington and the states,” to create RTOs with successful market design. Anderson is guardedly optimistic, “There may be an opportunity to get some agreement on problems and solutions in the market. Competitive suppliers are recognizing that some changes need to be made. I believe these need to be significant changes—and they have to be done soon.” The light at the end of the tunnel is not daylight, as some would hope; it’s the head- light of an oncoming train, he says. “The train wreck is going to happen if significant change is not made. If the train wreck happens, it will be ugly. Just look at Maryland (where there were widespread protests over a 72 percent rate increase in 2006) and Virginia (where a law was signed in July 2007 to reregulate the industry). It’s already happened there. Other states could be in line for the same type of action.” Trebing says he worries about where the vision for the industry’s future is coming from and hopes changes won’t be all crisisdriven. “I’m afraid for the future,” he says, “at this point, it doesn’t look good.” s Scott Ridley is a writer and policy analyst with more than 25 years of experience with electric utility issues. He is the author of “Decade of Upheaval,” a report examining the electric utility industry’s 10-year experiment with restructuring, published earlier this year by the American Public Power Association. APPA Management & Leadership Workshop CEOs, senior managers, and public power managers must understand the variety of internal and external factors that may affect their utility and know how to develop strategies to deal with them effectively. Participants in this workshop will leave the program with an understanding of: I I The role and responsibilities of the CEO and senior managers Leadership principles and processes— working with the board, staff, and customers Approaches to setting the vision and strategic direction for the organization Tools for implementing utility strategy and monitoring organizational performance Effective methods for managing people, resources, and change Are You Ready to Lead Your Utility into the Future? I I I For more information, visit our Web site at, For more information and to register, visit www.APPAnet.org and click on “Education” or contact Catherine Leonard at 202/467-2976 or cleonard@APPAnet.org. Invest in your work force today… Reap the benefits tomorrow 46 SEPTEMBER-OCTOBER 2007 PUBLIC POWER

Table of Contents Feed for the Digital Edition of Public Power - September/October 2007

Contents Washington Focus 10 Questions Public Power (Every) Week Training Tomorrow’s Work Force What’s in Your Wallet? U.S. Lags in Broadband Deployment Now What? For Engineers Safety Community Broadband For Governing Boards Human Resources Hometown Connections Customer Service DEED Index to Advertisers Advertisers by Category Parting Shot

Public Power - September/October 2007

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