Competition is changing the fundamental basis for doing business in the electricity generation market. As the market moves toward competitive market conditions, electricity will be viewed increasingly as a commodity -- not only supplied to customers within a utility's service area, but brokered and arketed outside its area as well. With movement toward retail wheeling being considered in California, Michigan, and New York, it may soon become a reality as well. This means that a utility can no longer feel secure as the monopoly supplier of electricity within its own frachise area. To remain the main supplier in its current service area and compete for customers in other service areas, utilities will need to understand and examine all the components of "busbar costs" at its generatin gunits. As competition drives the market to marginal costs, generating units with costs exceeding the market clearing price for electricity may soon have a limited role in the generation market. As the industry evolves, competition in the marketplace will force uneconomic plants to reduce costs or go out of business.
展开▼
