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Review of Article: "Integrated Resource Planning and Competitive Power Markets An American Viewpoint" By Vikram S. Budhraja

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Introduction

Agpasa, Eunice Bianca Reaction Paper Agustin, Mikhail George 30 January 2012, Monday Almodal, Antonio Paulo Chua, Arlene Leah 4IEB Article: "Integrated Resource Planning and Competitive Power Markets - An American Viewpoint" By Vikram S. Budhraja , Vice President, Southern California Edison Co. Delivered at the Energy Council of Canada Forum 1994, Montreal, Canada, October 25, 1994 From: Vital Speeches of the Day Let me start by Vikram Budhraja qouting Machivelli. "It must be remembered there is nothing more difficult to plan, more uncertain of success, nor more dangerous to manage, than the creation of a new order of things". In this article Vikram discussed the integrated resource planning by giving California's electric utility industry as an example. Starting with the industry's history, he was able to point out that we can still use the best attributes of integrated resource planning but still opening the industry from competitive market. By doing this they will be able to provide the consumers choice and will stop the monopoly of electric industry thus achieving lower rates in California's electric utility. ...read more.

Middle

California, having some of the highest electric rates in the country results to disconnect from the market place and from technological trends causing a collision course with emerging competitive trends, this have led to pressure for deregulation and competition. In this article, it is aim to determine on how can we preserve the best attributes of integrated resource planning while opening the market to competition. The speaker, in his talk included the three fundamental principles of the Blue Book. He stated that neither consumer nor shareholders like this prospect. Other parties, mostly environmentalist have concerns of their own which stem from the fear that competitive market system will mean less of their preferred policy. In the forum, he point out Edison's three-part plan in response to the commission's proposal. It is good that the speaker clearly elaborated the plan and the features of POOLCO, which is the centrepiece of Edison's proposal. This will give the viewer's a better understanding of what Edison Co. has planned. In the latter, he stressed that electric utilities will focus more on customers' needs and meeting them through investments on the customer side of the meter, giving consumer some assurance. ...read more.

Conclusion

It was also good that the company shifted their focus to customers, utilities and lower rates. How the company shifted also shifted to conservation has directly impacted the company's competition in the industry. With this, we can say that market, competition and technology have fundamentally changed the business giving them new market and opportunities for growth. California went to a competitive market structure to capture the efficiency benefits of supplier competition through lower prices. This worked when there was a surplus but the efficiency savings were overwhelmed by increased costs measured in tens of billions of dollars when the market stopped functioning. The government has stepped in to provide price stability and reliability. The new industry structure is still evolving. California's experience is a reminder that the physics of electricity, whereby production and consumption must be perfectly coordinated in real-time, is testing economics and free market principles. There must be flexibility and will to adjust market rules and operations in light of market performance. Competitive electric markets must be designed in recognition of the fact that electricity is different from other commodities, no storage, network effects, short time constants and that market economics and engineering realities have to be harmonized. ...read more.

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