Will competition enhance reliability?

Myth: Because it will put new demands on the transmission grid, competition poses reliability risks. Reality: Where have we heard this before? Every major industry that Congress has restructured has predicted dire reliability consequences at one point or another. Yet planes are still the safest way to travel, phone calls still go through, and trains run on time every day. It will be no different in the electricity industry. The same hollow arguments about the "threat" competition poses to electric system reliability were made when wholesale competition was being debated in the early 1990's. This has simply not proven to be the case. A study by the U.S. Congress Office of Technology Assessment found no evidence to suggest that non-utility generators were less reliable than traditional utility power plants. More recent studies indicate that competitive power suppliers are typically available to generate power greater than 95 percent of the time. No longer does anyone question the reliability of competitive power suppliers. It is equally important to recognize that giving customers a choice of generation suppliers will not change the system used to deliver electricity. The same people in the same bucket trucks will maintain and repair the same power lines that bring electricity to customers today. If anything, the status quo, which includes many of the competitive pressures but few of the market safeguards, creates reliability pressures. Utilities that own both transmission and generation assets may be cutting transmission related costs, such as tree-trimming, in order to enhance their position in a competitive generation market. Unbundling of these various functions—a step EPSA favors—will eliminate such cost shifting. In addition, in a competitive market all suppliers of electricity will insist on a system that is at least comparable to today's system. It's simply in the suppliers' best interest. If suppliers cannot get power to their customers on a consistent and reliable basis, they will lose those customers. Competitive suppliers of electricity will be willing to pay appropriate prices to ensure reliability of the grid so that they can maintain and expand their customer base. EPSA's arguments are supported by the conclusions of a Reliability Task Force appointed by the Secretary of the Department of Energy. The DOE Reliability Task Force concluded that "transmission grid reliability and an open, competitive market can be compatible."