by Brianna Crandall — February 18, 2013—Facilities managers may be interested in following the results of studies coming from the new Electric Markets Research Foundation, which has been formed to fund unbiased research that will examine the track records of centralized electricity markets and traditionally regulated markets in providing affordable and reliable supplies of power as well as meeting clean energy, transmission and environmental needs.
“There is a dearth of research available on this market-versus-regulation debate, and little analysis has been conducted on this 50-state experiment. The Electric Markets Research Foundation intends to address this by supporting research by academics and industry experts on major electric market issues, including customer rates, reliability and service,” said Bruce S. Edelston, the foundation’s president and the driving force behind the research effort.
More than 15 years have elapsed since some regions opted for centralized electricity markets that rely on competitive pricing and the establishment of large regional transmission organizations. Meanwhile, other regions resisted organized markets, retaining the traditional model for electricity based on utilities generating, transmitting and distributing power to customers at rates set by state regulators.
During the initial years of restructuring, numerous studies examined whether centralized or traditionally regulated markets produced lower rates for consumers. The results of these studies varied and typically supported conclusions based on the self-interest of the groups sponsoring the efforts, says Edelston. Some independent research, however, suggested that restructuring in the early years produced neither large gains nor losses for consumers.
The foundation’s research will evaluate how the two markets are addressing policy issues important to consumers and critical to the economy, including capacity markets and building new generation; transmission build-out; the risk-reward relationships among customers, utilities and power suppliers; regulatory jurisdictional issues; and renewable energy production, use and integration, both centralized and distributed.
At present, the foundation has no plans to conduct its own research, but instead will fund academic and subject-area experts, said Edelston, who has provided technical and policy advice to utilities, trade groups, law firms, energy companies and government agencies. The foundation will be governed by an independent board of directors, and is expected to be funded by electric utilities, other foundations and contributions from individuals and interested industry stakeholders.
