Importance Of Independent Power Generators Growing

Nearly every new power plant in the U.S. is being built by companies that are largely unregulated. The marketplace, not old-fashioned state regulatory commissions, dictates where plants will be built and what type of fuel they will use.

The new independents now account for more than 20 percent of domestic electricity generation -- and that figure is rising quickly.

Since the independents are now free to build whatever types of plants they want, more than 90 percent of those currently planned will run on natural gas.

Nonutility generators plan to build 250,000 megawatts of new capacity -- a huge addition to today's total of more than 700,000 megawatts.

Although insufficient supplies of electricity -- not deregulation -- have been responsible for California's power fiasco, politicians in some states are still misreading the root cause and are becoming cool toward deregulation. Of the two dozen states that still work on the old model of monopoly utilities with regulated rates and guaranteed profits, at least four have indicated they may rethink any moves toward open energy markets.

Executives of independent companies warn that efforts to cap wholesale electricity prices or otherwise restrain them will curtail new construction -- hurting consumers in the long run.

Source: Richard A. Oppel Jr., "Independent Plants Play Role in Electricity Troubles," New York Times, January 23, 2001.

http://www.ncpa.org/pd/regulat/pd012301a.html

-- Martin Thompson (mthom1927@aol.com), January 23, 2001