Making Competition Work in Electricity

Abstract

MAKING COMPETITION WORK IN ELECTRICITY by Sally Hunt (Wiley 2002) This is a timely book that challenges the reader. It is written in an engaging style by Sally Hunt, formerly head of the energy practice at National Economic Research Associates (NERA).1 Making Competition Work in Electricity is a distillation of Ms. Hunt's thirty years of experience as an energy consultant. Making Competition Work in Electricity is divided into two parts and composed of twenty chapters. In addition, there are six appendices, a glossary and a solid index. The book also is liberally augmented by tables and highlights key information in boxes sprinkled throughout. Making Competition Work in Electricity was written prior to the Enron debacle, the travails of the power trading industry, and FERC's Notice of Proposed Rulemaking on Standard Market Design. On these subjects, Ms. Hunt's commentary would have been especially illuminating. At the outset, Making Competition Work in Electricity has many admirable qualities that represent Ms. Hunt's experience and best thought. It also is written in a style that often relies on sound bites intended to capture the reader's attention. For example, Ms. Hunt writes; Electricity is not carpets - you don't order one and complain if they deliver... a different one (p. 288). What has been done in the United States can be likened to a meal without the main course; the appetizers and dessert have been served without the meat and potatoes (p. 249). and finally, in referring to the construction of new transmission facilities: The United States has gone BANANAS - Building Absolutely Nothing Anywhere Near Anybody (p. 206). Before commenting on the substantive thesis of Making Competition Work in Electricity, there are minor, but nagging faults with the publication. The footnotes generally are uninformative, and not supported by citation to published sources. For example, one footnote states: The full list of independence conditions is contained in FERC's Order No. 2000 (p. 269, n.3). IMAGE FORMULA9 Obviously, the reader would benefit from a list of those conditions, as well as a citation to Order No. 2000. Second, Making Competition Work in Electricity often is repetitive. An example occurs in chapter twenty which repeats Ms. Hunt's central recommendation set out in chapter eleven, as well as, on page eight. Third, only passing attention (ten pages)2 out of 450 pages refer to the natural gas industry and its restructuring. Finally, the glossary is too short, and not helpful since the definitions are truncated and are not written for the novice or the legal community. As to the merits, which are many, Ms. …