Spike: A New Delinquent on the Electrical Scene. Who Sired Him?

Abstract

Reddy Kilowatt has a new, juvenile delinquent, possibly illegiti-
mate brother, "Spike." Like a leading character on the TV cartooncom
"Sou th Park," his parentage is both uncertain and a matter of great
speculation. Who bred Spike in '98? Will there be a proliferation? Since
Linda Tripp could not get through to FERC Chairman Hoecker, there is
no star witness, but merely a series of finger pointing accusations. Nu-
merous deregulation-based commercial initiatives could be impacted: a
matter of great significance to a variety of project privateer sponsors .
Whether the demise this year of the Schaefer deregulation bill on
the Hill was the result of a certain nefarious non-gavel wielding Michi-
gan Democrat (as the Republicans charged) or not, its Lazarus-potential
quotient surely will be a function of the Spike Sire issue.
The deregulation legislation's godparents ELCON and the great
industrial power users "know" who spawned Spike: it was large utilities
that ignored their tight supply situation, and the absence of workable
Midwest wholesale markets or any reta il markets. The fix for this prob-
lem , then (drum roll please): accelerated deregulation of utility -owned
generation , more independent system operators, and a wholesome (fa-
talistic?) tolerance of the fact that price spikes are a known risk of
competitive markets. (Presumably, the industrials know whereof they
speak, at least as it relates to them: for the first time since 1990, the retail
rate for industrial consumers was considerably lower than the price
IOUs paid for firm power.)