About Us

US Deregulation Creates Power Quality Uncertainty

Published: Friday, 16 November 2001

By Sara M. Bradford

Power quality concerns are very legitimate in a world of e-commerce, high-speed data lines, and other power-sensitive technology operations. As the process of electric deregulation continues its slow spread across North America, many customers have become confused as to the effect of deregulation on power quality. Some suggest that the more efficient, cost-conscious electric utilities patterned by deregulation will somehow allow power quality to suffer in exchange for increased profits.

On the other hand, others believe the newly competitive utility entities will become more conscious of power quality issues as they compete for customer business. In any event, the result is expected to be an increased focus on power quality issues ultimately by the consumer. This will expand customer awareness of the benefits of these services.

Deregulation Lowdown

As one of the last major regulated energy industries in the United States, the electric power industry is in a state of constant change and increasing competition. Both of these competitive factors have their pros and cons, including competitive pricing but sometimes less reliable power.

Currently, retail electricity customers in some states such as California and New York can choose their electricity company. Wholesale electricity trading markets that were nonexistent until recently have emerged, and are in full operation in many regions of the country. The magnitude of competition resulting from independent power producers and power marketers has increased substantially over the past few years.

However, this transition has not been seamless in its initiation. Recently, California experienced problems with its deregulated electric power markets. Electricity prices in some parts of the State have tripled, leaving consumers dissatisfied. In addition, the State has experienced supply problems sporadically, which oftentimes include brown- and black-outs.

As with many regulatory issues, there are two sides to the story for electric power deregulation. Some observers opine that deregulation should be done away with as the process has created too many problems. Others argue that deregulation is a noble endeavor and many of the problems states are experiencing can simply be solved with structural adjustments in each market.

What This Means for Power Quality

In the short term, stable electricity service could be threatened as states begin to deregulate their electric utility markets. Consumers have resorted to protecting all of their equipment ranging from server networks to entire telecommunications networks at the highest level possible. This increase in power quality demand has greatly influenced the services market. As more states become deregulated, it is expected that there will be an increase in industry confusion. That in addition to the technical limitations of power grids could potentially result in unstable service.

A major challenge to the deregulated electric power industry is the increase in the volume of transactions. This increase in transactions ultimately changes the way power flows through the grid, creating new patterns with magnitudes and directions that have previously not been witnessed or studied. This creates minimal operating experience in this industry for these types of problems.

The instability in today's power markets in addition to the demand for clear power creates challenges for both the electric power industry and power end-users. For peace of mind, customers are turning now more than ever to high-quality, redundant backup and conditioning power equipment, in addition to power quality services to help maintain reliable systems in the event of power failure or degradation.

Return