2001
Power market problems could spread without new approach to transmission
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30 January 2001
PA Consulting Group identifies transmission sector solutions to alleviate growing electricity price and availability concerns
PA Consulting Group, with support from National Grid, today released "The Future of Transmission in the US: A Vision for Transmission as a Vibrant, Stand-Alone, For-Profit Business," in response to growing concerns over the transmission of electricity.
The transmission sector has not moved as rapidly to a strong business model as other sectors have in electric power restructuring, despite transmission's critical influence on the availability, reliability and prices of electricity. The paper argues that the success of existing and future electricity markets greatly depends upon increasing the U.S. transmission system's capability to move more electricity when and where it is needed. Therefore, to improve the existing structure, the paper proposes forthright implementation of light-handed incentive regulation of for-profit transmission companies to promote investment and to reward performance. This, coupled with the freedom for such companies to act on such incentives, will yield the greatest benefits for electricity consumers.
"Electricity market problems in California and elsewhere highlight the need for change in the industry business model, particularly in electricity transmission. The transmission system in the United States is in serious need of improvement if it is to successfully support the growth of wholesale and retail electric power markets," stated Roger Gale, global head of PA Consulting Group's Energy Practice. "Providing for-profit firms with financial incentives to increase access for new energy suppliers, to improve customer service, and to reduce costs is the most effective way of providing consumers with reliable, reasonably priced electricity in the future."
The Federal Energy Regulatory Commission's (FERC) transmission policy provides transmission owners with options including the adoption of incentive-based regulation of for-profit transmission entities. However, this proposal needs to be implemented in a way that establishes unequivocally a new era in regulation of the transmission sector and empowers this vision for superior performance through a sustainable business model for the future.
"The PA Paper takes a close look at the important issues facing the transmission business and provides workable solutions for many of the challenges facing the transmission sector and the U.S. electricity markets in general," commented Ian Davis, Vice President of Transmission at National Grid USA. "This paper should significantly add to the focus and level of debate on transmission issues and the potential for unlocking and delivering value for electricity customers."
The paper can be downloaded (PDF, 385k ) from this Web site.
For more information, please contact:
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| Derek HasBrouck |
| PA Consulting Group |
| The Chrysler Building |
| 405 Lexington Avenue |
| New York, NY 10174 |
| United States |
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Tel: +1 212 973 5982 |
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Fax: +1 212 973 5959 |
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E-mail:
derek.hasbrouck@paconsulting.com |
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Notes to editors
PA Consulting Group is a leading management, systems and technology consulting firm, with a unique combination of these capabilities. Established almost 60 years ago, and operating worldwide from over 40 offices in more than 20 countries, PA draws on the knowledge and experience of some 3,700 people, whose skills span the initial generation of ideas and insights all the way through to detailed implementation.
PA builds strategies for the creation and capture of shareholder and customer value, and helps clients accelerate business growth through innovation and the application of technology. PA works with clients to improve performance, mobilize human resources and deliver change effectively, including managing major projects, and designing and implementing enterprise-wide systems and full e-business solutions.
PA focuses on creating benefits for clients rather than merely proposing them, and this focus is supported by an outstanding implementation track record in every major industry and for governments around the world. PA also develops leading-edge technology both for its clients and within its own portfolio of venture companies in areas ranging from software to wireless technology to life sciences.
PA distinguishes itself from its competitors through the range and quality of its people, the depth of its industry insight, its development and use of technology, and also its independence and culture of respect, collaboration, and flexibility in working with clients.
We are proud that our clients say, "PA makes it happen."
National Grid USA, headquartered in Westborough, Mass., owns and operates transmission and distribution systems in New England. National Grid USA is a wholly owned subsidiary of The National Grid Group plc, a global, U.K.-based company that builds, owns and operates electric and telecommunications networks around the world.
Background: The Energy Practice at PA Consulting Group
The Energy Practice at PA Consulting Group delivers a wide range of strategies for leading electricity, water, natural gas and petroleum companies in the U.S. and worldwide. Taking an innovative, results oriented approach, we work with our clients from "insight to implementation," addressing both current and future needs as liberalization, globalization, and e-business radically change the nature of the market and of trading activity.
Companies are increasingly being exposed to risk and the expectations of both customers and capital markets, as they strive to create value. Those who respond in the right way can create enormous opportunities for growth. PA provides the strategic and implementation insights and processes for companies to succeed. Open to innovative ways of doing business, including success-fee work, the Energy Practice is at the leading edge of the competitive agenda in energy.
The Practice has some 300 dedicated professional staff specializing in energy, and can also draw on the expertise and experience of PA Consulting's 3,700 staff, working in over 40 offices in some 20 countries.
The Energy Practice works with nearly 40 of the 50 largest global energy companies, as well as with many of the creative niche players, with operations in North America, United Kingdom, France, Scandinavia, Australia, New Zealand, Southeast Asia, Japan, Argentina, and Brazil. With an outstanding record across industry and government, our experience covers market structure and regulation, strategy development, asset valuation, network performance, supply chain and asset management, trading and risk strategies, e-business, retail strategies and litigation services.
Our clients and our people recognize that PA Consulting is dedicated to assisting energy companies as they face the challenge of the future, delivering unique industry insights and innovative end-to-end solutions.
For more information about PA's Energy Practice, please contact Kara Stecker at +1 202 828 3958 (kara.stecker@paconsulting.com).
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