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Date: Thu, 14 Feb 2002 04:07:00 -0800 (PST)
From: hduncan@caem.org
To: m..scott@enron.com
Subject: NEW Document Available From CAEM
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***** NEW Documents Available From CAEM Free of Charge *****
=20
The Center for the Advancement of Energy Markets (CAEM) is pleased to annou=
nce the availability of two ground-breaking documents -- "The Role of the F=
ederal Government in Distributed Energy" and "The Role of the Default Provi=
der in Restructured Energy Markets" -- that are available free of charge.  =
To access the documents, visit us at our web site -- www.caem.org =20
=20
After over 6 months of intensive work by CAEM's Distributed Energy Task For=
ce, CAEM is releasing a comprehensive report on the "THE ROLE OF THE FEDERA=
L GOVERNMENT IN DISTRIBUTED ENERGY" prepared by Nat Treadway, a CAEM Senior=
 Research Fellow, and Ed Reid, CAEM's Senior Technology Fellow. =20
=20
The report describes the major Federal government activities that encourage=
 or hamper the commercialization of distributed energy (DE) and recommends =
changes that could allow DE to play a more significant role as a choice amo=
ng competing energy services.  The overarching conclusion of the report is =
that unless the Federal government takes affirmative steps to promote DE, t=
he existing policies, regulations, and business practices will continue to =
hamper its development.  The report makes a number of recommendations that =
will be important to policymakers at both the federal and state levels of g=
overnment.  This 70-page report is a must read for stakeholders interested =
in distributed energy. =20
=20
A white paper on "THE ROLE OF THE DEFAULT PROVIDER IN RESTRUCTURING ENERGY =
MARKETS" was prepared by Ron Sutherland, a CAEM Scholar, as part of CAEM's =
DISCO of the Future Forum. =20
=20
The paper offers an insightful analysis and critique of the current models =
utilized by states to offer default service.  The conclusions are summarize=
d at the end of the paper, but the main result is noted here. Each state im=
plicitly adopts a model of competition in its electricity and gas markets. =
 This model then influences (if not determines) the choice of default provi=
der.  The commonly accepted model of competition permits the local utility =
to remain a competitor in the merchant function, where the utility is likel=
y to be the default provider.  In the restructuring efforts of those few st=
ates where the utility exits the merchant function, an energy supply compan=
y is likely to be the default provider.  Various risks, inefficiencies or n=
on-competitive elements do not result from the choice of default provider, =
but from other elements in the transition process.  Price caps are the majo=
r factor contributing to risks and inefficiencies where the utility or an i=
ndependent energy provider is the default provider.  That is, it is not the=
 default service provider framework, per se, that is responsible for the ri=
sks. The purpose of this study is descriptive not prescriptive, however a t=
entative suggestion is offered.  Few customers will require default service=
 if energy service providers have incentives to offer service at pricing an=
d other terms that cover costs.  If the need for default service occurs, cu=
stomers will most likely obtain service if the default provider can offer s=
ervice at pricing and other terms that cover costs. =20