Challenges for Creating a Comprehensive National Electricity Policy

Abstract

The industry structure and regulatory framework that characterizes the electric power sector in the U.S. is in a state of disarray. Some regions have adopted a fully liberalized electricity sector model, others have retained the traditional model of regulated vertically integrated monopolies, while still other regions are "stuck" with combinations of both. This situation will undermine the ability of the U.S. electric power sector (a) to provide an abundant and reliable supply of electricity efficiently, (b) to confront retail consumers with the appropriate prices to encourage efficient utilization of electricity, (c) to meet greenhouse gas mitigation goals efficiently, and (d) to support efforts to increase energy security and reliability. A federal reform program for dealing with the underlying structural and regulatory problems is suggested.