History of Electric Utility Deregulation, 2000 - Impact on Coal

Traditionally made up of regulated monopolies serving prescribed state service areas, the U.S. electric utility industry may ultimately become a nationwide competitive electricity market.  The expanded authority (Energy Policy Act, 1992) of the federal government to order utilities to wheel power from generators to wholesale buyers (municipalities and other utilities), has opened the U.S. electricity grid to competitive wholesale transactions.  In 1996, Federal Energy Regulatory Commission (FERC) Order 888 addressed the issues of open access to encourage wholesale competition to the electric utility industry and FERC Order 889 required utilities to share information about available transmission capacity.

While initial efforts to form a more competitive electric market in some states, such as California, have resulted in disaster during periods of both "under-supply" and "over- supply," other states have greatly intensified pressure to keep generating costs low.  Coal-fired generating plants close to major power markets will be well positioned to compete with low-cost power.  As new generating plants are needed in the coming decade and beyond, coal's ability to capture this new market will be aided by its low and stable cost, by expected increases in the cost of natural gas, and by increasingly efficient and environmentally beneficial Clean Coal Technologies.

 U.S. Electric Power Plant Shipments