Many states within the U.S., and many countries across the world, are opening their electicity markets to competition. Many others are uncertain about their plans. These differences emphasize the complexities involved in the technology and regulatory structure of the electricity industry--an industry for which the introduction of market competition has been notoriously difficult. In response to these challenges, Alternating Currents provides a timely overview and analysis of the concerns facing industry regulators, legislators, and others as they consider whether, when, and how to open electricity markets. Authors Brennan, Palmer, and Martinez offer background on the history of regulatory policy and the technology for producing and delivering electric power. They then provide insights into the policy debates and economic issues involved in eleven important topics, including industry structure, system integrity and reliability, the mitigation of market power, and environmental protection. Alternating Currents describes the recent events leading to the demise of retail competition in California with the intent on drawing lessons for the future. In the end, the authors offer their perspective about what makes electricity a unique resource and how those factors make the potential conflict between competition and reliability the most pressing of the long-term concerns about the transformation of the electric power industry.

PrefaceIntroduction1. Issues in Restructuring the Electricity IndustryPart I: How the Industry Got Here2. Understand the Electricity Industry3. From Regulation to Competition4. International and U.S. Restructuring Experiences5. The California ExperiencePart II: Current Policy Issues6. Competition in Energy, Regulation of Wires7. Vertical Restructuring8. Regulating Rates for Transmission and Distribution9. Encouraging Competition10. Balancing Loads and Dispatching Power11. Ensuring Reliability in a Competitive Market12. State and Federal Roles13. Public Power's Role after Restructuring14. Covering Stranded Costs15. Restructuring and Environmental Protection16. Public Purpose Programs in a Competitive MarketPart III: The Future17. Prospects for RestructuringSupplemental ReadingIndex