Companies, people, ideas

In this article the author has rightly claimed that energy transport system of the country is inefficient and fragmented. In fact the author has substantiated his claim of fragmented energy transport system by many relevant examples and has shown how this fragmented system is leading to inefficiency. According to the author, the flawed policies have given the regional utilities companies’ unduly high protection against competition. An example is ban on more efficient combined-cycle generators in Florida on the dubious ground of wastage of water.

However, main focus of the author is on excessive control of regional utility companies on electrical transmission grid under their control. These utility companies has free hand in determining how much power they will accept in their grid. They have this protection under law and but natural they use this to their advantage in determining how much power they will accept in their transmission lines and hardly consider the public welfare in determining so.

This has led to overshooting of power price during peak periods in many part of the country, while plenty of cheap power was available in the other parts of the country. The author has presented another example of how construction of transmission line was opposed on the pretext of environmental concerns while actual concern was profit/loss of those being affected by the project. Though, the author seems to agree that greed of the regional utility companies is behind the problem, he is not blaming these companies for their greed. What author says is that given an opportunity anybody will go for monopoly and not for competition. Instead, the author has blamed lack of incentive in promoting decongestion.

Unless there is some incentive, why the utility companies will go ahead to loose their monopoly – what for? One option could be that the utility companies should be made to cede their control on determining how much power should be allowed in their grid, rather this should be done by Federal Energy Regulatory Commission. But quite naturally, they should be given some incentive.

It can be said that the author has been successful in analyzing and supporting his claims of flawed policies being root cause of the inefficient and fragmented energy transport system.