No. 79 The Future of Electricity: Reliability in a Competitive World

Published December 1, 1996

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Welcome! The Heartland Institute is very pleased to co-host this event with Citizens for a Sound Economy. Joe Wiegand, the Illinois Director for Citizens for a Sound Economy, is here. If you want to learn more about Citizens for a Sound Economy, talk to Joe. There is also literature on the table as you came in to give you more background on CSE.

The Heartland Institute is a non-profit think-tank. For the last 12 years we’ve been doing a lot of work on finding market alternatives or market solutions to social, political, and economic problems. It’s our area of specialty, and it’s why we’re interested in the electricity deregulation debate. If you have any questions about The Heartland Institute, there are a number of Heartland staff people and board members here today.

I’d like to thank Dr. John Bilson for letting us use this beautiful auditorium. Dr. Bilson is the Program Director of the Financial Markets and Trading Program of the Stuart School of Business at IIT. For those of you who aren’t aware of it, that program is one of the only programs in capital markets worldwide. It’s a rapidly growing, highly respected program.

The purpose of this event is to describe and solve some of the problems involved in deregulating electric utilities. These problems are not minor, and they can’t simply be assumed away. The industry is huge, over $200 billion a year in billings. We have over a 100-year record of utility regulation. Maintaining the viability of the industry is crucial for safety purposes, for economic development purposes, for environmental purposes. It has a major impact in all these areas.

What makes today’s conference unique is that we’re bringing voices from the financial industry into the debate on electricity utility deregulation, and we’re hoping that our bringing together of economists and industry experts and financial experts will spark some creativity and some solutions that haven’t been part of the public debate so far.

This morning’s program begins with a presentation by Jim Johnston, laying out some of the issues and some of the parameters for debate, and some of his insights into the requirements for effective deregulation. Congressman Dan Schaefer will then describe recent efforts at the federal level to encourage deregulation. Joe Wiegand will then respond to Jim’s comments. Next up will be spokespersons from Commonwealth Edison and CILCO, and a presentation by a spokesperson from the New York Mercantile Exchange, Brad Leach.

Proceedings of a conference, “The Future of Electricity: Reliability in a Competitive World,” held in December 1996 and published as Heartland Policy Study #79 (Chicago, IL: The Heartland Institute, April 1997). Copies of the study are available from The Heartland Institute for $15 each. You can also download the full text, free of charge, in Adobe’s PDF format; click here.

Permission is granted to reprint or quote from this Executive Summary, provided appropriate credit is given.

Copyright 1997 The Heartland Institute. Nothing in this Executive Summary should be construed as reflecting the views of The Heartland Institute, nor as an attempt to aid or hinder the passage of any legislation. Permission is hereby given to reprint or quote from this Executive Summary; please send tearsheets to The Heartland Institute, 19 South LaSalle Street #903, Chicago, Illinois 60603.

Questions? Call us at 312/377-4000; fax 312/377-5000; email [email protected]; Web

Joseph L. Bast is president of The Heartland Institute, a nonprofit and nonpartisan public policy research organization headquartered in Palatine, Illinois.