Impact of regulations on electric distribution market

For decades the electric market, from generation to consumption, was monopolized and regulated. The regulators mainly concentrated on regulating prices charged by utilities to their captive customers both at the wholesale and retail or distribution levels. The United States was one of the first countries to implement deregulation first at the power generation level and allow open access to the bulk transmission system. The Federal Energy Regulatory Commission ("FERC") in USA issued a well known series of Orders namely 888, 1000 and 2000 which made the bulk transmission lines common carriers and the operation of the transmission systems were transferred to Independent Systems Operators/ Regional Transmission Organizations (ISOs/RTOs). The ISOs/RTOs not only started controlling bulk transmission, they started operating and managing wholesale capacity, energy and ancillary service markets. These markets also provided ISOs/RTOs control over the dispatching of generators. The open access and competition at wholesale or bulk level was followed by the deregulation at the distribution level also which provided end users the opportunities to obtain power from non-utilities suppliers. The new environment also offered opportunities to the electric industry as well as customers to explore the means to increase efficiency and reduce the cost of generation, transmission, distribution and utilization which resulted in new inventions such as the new means to conserve power, the smart grid and distributed generators. The ISOs/RTOs not only relied on generators to balance their systems, they also started encouraging Demand Side Management resources and distributed generators to provide electric products to the wholesale markets. This paper will provide a brief history of various U.S. laws and regulations at the wholesale and retail lev