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Rethinking US Energy Policy
Deregulation in the US energy market lowered retail prices and encouraged the development of more efficient and economical plants—especially those powered by natural gas. But deregulation also removed guarantees that investors in new plants would make money. Without those regulatory assurances, it is becoming difficult to raise the billions of dollars needed to finance new electrical-generating capacity in the United States. Meanwhile, natural gas has become much more expensive. The power industry can take steps to help, such as modifying pricing practices to reduce peak demand, but regulatory change is also necessary.
The take-away: It's time to debate an integrated national energy policy that compensates producers for risks while balancing environmental and power generation needs.
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