Assessment of DoD Electric Power Supply Options, Strategies, and Costs Under Retail Open Access

Over the last several years, there has been increasing recognition that electric power rates in many parts of the country are above competitive market levels. The reason for the difference between regulated and competitive rates rests in dramatic changes to the generation segment of the industry. Numerous factors have combined to drive up the generation costs that are recovered under regulation. At the same time, significant changes in generation technology and reductions in fuel prices have reduced the cost of power from new generating facilities, driving down competitive prices for generation. Similar changes have not affected the transmission and distribution sides of the business therefore, the generation market is the focus of competitively spurred reductions in electricity prices.