Economic efficiency, independent power producers and wheeling

Traditionally, electric utilities have sought to decrease the cost of production by such means as merit order running of machines, by improving equipment efficiency, by fuel mix, by interconnection and exchange of cheap energy, and by unit participation and firm purchase and sale contracts for long term savings. The author discusses some of the costs that, under the anticipated US modus operandi, must be integrated into the planning, process while meeting the new challenges. The costs are those relating to third-parties, costs of transmission constraints, and costs of wheeling. The opinion is ventured that much of the efficiency improvement anticipated during the debate has already been achieved by conscientious utility managements.<>