Its the market, moron!

In reference to your commentary about the American utility market, all I can say is, “It`s the market, moron!” For years REGULATED utilities-and Con Edison of New York is one of them-have had to justify all the building of all new transmission & distribution to their respective PUCs. All the while being limited to what return could be received on their investment.

In case it has not dawned on anyone at your pro-marketer magazine, utilities ONLY make money when the meter is turning. RELIABILITY keeps the meters turning. Marketers do not care or seem to understand about reliability. Neither do non utility generators. Only when power schedules have to be cut due to “reliability” concerns do they even notice. Then it is to complain instead of solve. The North American system was designed for reliability, not an open market where concern is the bottom line of Joe Schmo`s Energy Marketing.

It was designed for each respective utility to meet the needs of its customers. Each interconnection was designed for the reliability of their customers. Not so the market can force energy to be shipped where it receives the best price, and not where it is needed.

Utilities are businesses too. When a marketer offers power cheaper than a generating unit can produce it, due to much needed maintenance, (it all about heat rates) a utility would be criminal not to take advantage of the opportunity to repair the unit and return it to service at a lower cost. And when the unit is shutdown for the repairs, and the marketer cannot meet its obligations, guess what? But, utilities cannot build new units without approval from the PUC. The PUC rarely allows the evil utility to build. But the good NUG has no concern in this matter. Not only are they allowed to build, but they can charge lower prices, while the regulated, and yes we are still regulated, is forced in many cases to charge a price that cannot go below a certain level.

Unfortunately, that knife cuts both ways. The regulation that allows a utility to get a guaranteed return, is now being used to limit their market.

The biggest problem with the fantasyland theory about the open market is that no matter what reputation a company has, it still has to use the utilities` grid. You can offer rock bottom prices. But reliability is not your concern or responsibility. It all falls on the utility. And until the market shares in the concerns by investment in the system, instead of reaping benefits and huge profits at the expense of the companies that by law have to maintain reliability, will we see an improvement.

I work as a system controller in the ERCOT. I see first hand how the market is driving us into the dark with its ill planned and reckless speed to make money. Consider this analogy. You live on a nice two-lane road. It`s old, but due to limited traffic, is more than adequate for the needs of its users. Now the government changes the zoning laws for your area. Outside concerns now start building malls and sub-divisions along your road, forcing a large increase in traffic. But the government is happy because the new zoning allows an increase in tax revenues, and more votes. But your road cannot handle the traffic. What to do? Improve the road? Yes. Who pays? Not the new traffic. They demand a better road. But who pays? And if you can find the funding, what do you do while the road is shut down for the improvements? That would inconvenience the users. Can`t have that. So the road deteriorates and you have FAILURE. But the bottom line is nobody wants to pay now. We will just have to pay with the “innocent human lives” that you talked about. But after all the market allows them to get cheaper electricity that cannot be delivered due to the fact that it will have no way to get there. And that sir, is the bottom line!

Kevin S. Morley

System Controller

Reliant Energy Houston Lighting & Power

Spring, Texas

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