Current US electricity markets are showing improvement, reflecting improvement in the economy as a whole. However, we do have several concerns for the future. The risks which accompany new power plant construction have led the industry, as well as others, to seek out new alternatives. Canadian imports, cogeneration, and improved bulk power markets all have a role to play in future utility planning. But, I believe we must still retain the option of new central station generation. Current attempts in the US to remove capital formation incentives through tax reform, to prohibit construction work in progress in the rate base, and to exclude surplus capacity from cost recovery are examples of public policy decisions which we believe would be counterproductive to providing low cost, reliable power to consumers. Rather, we believe public policy should focus on providing the utility industry with the opportunities to make the best long-term economic decisions on behalf of its customers.
Modelling Spot Prices in Deregulated Wholesale Electricity Markets: A Selected Empirical Review