True competitioncan benefit the environment
Real competition in the electric utility industry would be good for the environment, although most current restructuring proposals would not, according to recent report from Michael G. Banta, Indianapolis Power & Light Co. vice president and assistant general counsel.
A comprehensive plan for national retail customer choice, excluding stranded cost recovery and distance-sensitive transmission rates, can offer definite environmental benefits, such as: accumulation of spent nuclear fuel and other waste products from non-viable nuclear power plants would be minimized; rapid deployment of renewable power supply resources would become more viable; use of environmentally beneficial electrotechnologies would be promoted where they are most needed; the cost of production for high-emissions fossil-fuel power plants would increase and greater use of low-emission facilities would be promoted; and the opportunity for consumers to make a market choice of power supplier based on benefits to the environment would be allowed to develop.
“A full and fair market for competitive electric power can produce such environmental benefits. The environmental community must not be seduced into opposing the benefits to both consumers and the environment that true reform can bring, merely because most current proposals for restructuring fail to produce such benefits,” Banta stated.
“It is the failure of most current proposals to produce true, workable competition that presents severe environmental problems, not competitive commerce itself.” Banta contends that true competition would benefit strong, profitable nuclear plants while closing plants with operating costs exceeding the market price, reducing spent fuel and other waste streams that require storage and disposal.
Renewable power supply resources could become increasingly attractive from technical and economic views. “Currently, pancaked, distance-sensitive transmission rates for use of the national grid make renewable power very costly in remote markets,” the report stated.
“An alternative plan providing for a uniform, non-distance-sensitive price for use of the transmission grid over wide areas of the nation would allow renewable resources greater access to wider markets. Absent such transmission pricing reforms, renewable power resources may long remain primarily a niche energy source for meeting local needs in environmentally sensitive areas or in isolated regions not served by existing power suppliers.”