Does competition = decrease in reliability? : LUSENET : Deregulation / Restructuring Discussion: - Energy Utilities in the 21st Century : One Thread

Here's an interesting article that popped up on the AP wire today (click on the hot linnk to go to the full story):
Competition May Affect Electricity

WASHINGTON (AP) - An Energy Department task force says the electric industry's rush toward competition is making America's power system less reliable.

The group examined power disruptions during peak electricity demand last summer in Chicago, New York City, Texas and other areas in the mid-Atlantic and Gulf Coast states.

``Aging infrastructure and increased demand for power have strained many transmission and distribution systems to the point of interrupting service,'' said the interim task force report. It said some utilities, in focusing on surviving in a competitive market, cut spending on areas aimed at reliability.

Increased electricity use and new demands caused by the trend toward competition among power providers ``are stressing the electrical system'' and increasing the risk of temporary blackouts or brownouts during peak demand periods, the report continued...

Comment: Before I left my last utility employer, I spent about 6 months working closely with one of the top corporate T&D managers. An ongoing gripe of his was the increased maintenance intervals, a move toward "fix on failure" rather than preventive maintenance, and workforce cutbacks that were being imposed on his department. His contention at the time was that customers would begin to be impacted by these "business decisions", from a reliability standpoint, a few years down the road.

In an effort to become leaner and more competitive, have electric companies not only "cut the fat", but started to sever limbs? More and more studies are being released which suggest that the current competitive environment and reliability issues are very much linked at the hip.

Keep your eye on these issues during the peak load times this coming summer.

-- Rick Cowles (, January 06, 2000



I'm sorry that I have been so slow to respond to this item.

Here in New Zealand we have already been right through the deregulation process and had 4 years for the system to settle down and iron out all those teething troubles.

Our experience has not shown any decrease in reliability, or any electricity shortages as result of de-regulation. This is suprising as we have had two years of drought during that time, and 2/3 of our electricity generation is hydro based. What we have experienced though is an increase in power prices to the domestic consumer, and more times that the national dispatch center has had to issue Grid Security notices due to a lack of reserve.

it will be very interesting to see how the USA market deal with these issues.

-- Malcolm Taylor (, March 06, 2000.

We are living in constantly changing enviornment now and certain changes are in evitable. We have seen a drastic benefit to consumers in computers and telecommnication sector and all these would not have been possible without deregulation mechanism in the first place. Have you seen the ruling on BIG BILL GATES! After that there should be not even second thought for the urgent need to bring competition in the energy industry which has been so monopolistic in nature! Lastly, I would like to state that "The ship is safe in harbour but that is not what the ship is made for." We should not be afraid of these transition period how ever what I feel that government should impose penalty for deprivation of power to the consumer without due reasons. Keep watching!

-- ashish g shah (, April 05, 2000.

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