The Virtual Utility

In the winter of 1996, after 4 years of planning and research, the Symposium on the Virtual Utility was held in Saratoga Springs, New York. It was sponsored by Niag ara Mohawk Power Corporation, Co-sponsored by CSC Index and the New York State Energy Research and Development Authority and hosted by Rensselaer Poly technic Institute, Troy, NY. The symposium sought to identify new areas of inquiry by presenting cutting-edge academic and practitioner research intended to further our understanding of the strategic, technologically-driven issues confronting the elec tricity production and distribution process. The program sought to offer new in sights into rapid changes in the utility industry, in part, by examining analogues from manufacturing and telecommunications. In addition to identifying new research areas, the symposium yielded a number of important findings and conclusions. This volume contains the presented papers of the meeting, the discussant reports and two special papers prepared by the meet ing rapporteurs who performed superbly in analyzing, synthesizing, explaining and generally bringing a cohesive perspective to the interesting yet complex set of ideas presented at this unique meeting. We would like to acknowledge the people and organizations that contributed to this effort. We thank Niagara Mohawk Power Corporation and Albert Budney, its President & Chief Operating Officer for sponsoring this project, and Andrew Vesey, Vice President, I whose vision, support and championing made this project possible.

I Introduction.- Editor's Introduction and Reader's Guide to this Book.- II Historic and Strategic Perspective: From Monopoly Service to Virtual Utility.- 1 Consensus, Confrontation and Control in the American Electric Utility System: An Interpretative Framework for the Virtual Utility Conference.- 2 The Virtual Utility: Strategic and Managerial Perspectives: Welcoming Address.- 3 Being Virtual: Beyond Restructuring and How We Get There.- III The Virtual Utility: Planning and Strategic Investment Analysis.- 4 The Virtual Utility: Some Introductory Thoughts on Accounting, Learning and the Valuation of Radical Innovation.- 5 Justifying Capital Investments in the Emerging Electric Utility: Accounting for an Uncertain and Changing Industry Structure.- Discussion.- IV Risk Management, Options and Contracting for a Virtual Utility.- 6 Integrating Financial and Physical Contracting in Electric Power Markets.- 7 Capacity Prices in a Competitive Power Market.- 8 Managing Risk Using Renewable Energy Technologies.- Discussion.- V Industrial Organization, Technological Change and Strategic Response to Deregulation.- 9 Monopoly and Antitrust Policies in Network-Based Markets such as Electricity.- 10 Services in an Unbundled and Open Electric Services Marketplace.- 11 Technological Change and the Electric Power Industry: Insights from Telecommunications.- Discussion.- VI Network Architecture and Standardization.- 12 Interconnected System Operations and Expansion Planning in a Changing Industry: Coordination vs. Competition.- 13 Rules of the Road and Electric Traffic Controllers: Making a Virtual Utility Feasible.- Discussion-The Walrus and the Carpenter: Two Views on Network Services for Virtual Utilities.- VII From Monopoly Service to Virtual Utility.- 14 The Future Structureof the North American Utility Industry.- VIII Perspectives.- 15 The Bottom Line: A Summary and Analysis of the Virtual Utility Conference.- 16 The Virtual Utility And Environmental Stewardship.