OVER THE RIVER AND (AROUND) THE WOODS TO GRANDMA'S HOUSE WE GO: LONG-TERM FIRM TRANSMISSION RIGHTS, TRANSMISSION MARKET POWER & GAMING STRATEGIES IN A DEREGULATED ENERGY MARKET-AN INTERNATIONAL COMPARISON

Richard R. Bradley, University of Houston

Abstract

This Article was awarded the 2006-2007 Gulf Coast Power Association Scholarship in Electric Power for student writing involving electric power regulation. This Article focuses on the history of electricity deregulation and the current structure of the transmission grid while exploring the antitrust implications of firm transmission rights and gaming behaviors through reduced competition, decreased electricity reliability, and, typically, higher prices to consumers. Furthermore, this Article illustrates how the international community addresses the non-competitive aspects of transmission capacity. Among the countries examined are: England, the Scandinavian countries of Finland, Denmark, Sweden, and Norway, and Argentina. Many of the aforementioned electricity markets mirror United States electricity markets in structure or regulation. In fact, the European Union recently enacted legislation that appears to implement the remedies suggested in this Article to some degree. Finally, this Article employs a cost/benefit analysis of possible remedies, including a complete separation of generation from transmission facilities and a complete nationalization of the transmission market in order to combat transmission market power to achieve true competition in energy markets that results in quantifiable benefits to the consumer.