RETHINKING REFORM OF ELECTRICITY MARKETS

The reform of regulation of electricity markets has the potential to cause substantial changes in the way in which consumers receive and use electricity. It is argued that the US should pursue a Smart Model of electricity generation that addresses a primary limitation of current efforts to restructure electricity markets. The negative impacts on the environment associated with the generation of electricity and the production of energy used to generate electricity are described. Then the birth, life, and death of the Traditional Model are described. Finally, a Smart Model of electricity generation, composed of four elements, is described. A Smart Model of electricity would rely on both distributed generation, which is composed of small-scale sources of electricity generation that are environmentally friendly, and solar- and wind-generated electricity because they are renewable sources of energy. It is proposed that a Smart Model of electricity consumption is a more viable reform.