***** NEW Documents Available From CAEM Free of Charge *****
 
The Center for the Advancement of Energy Markets (CAEM) is pleased to
announce the availability of two ground-breaking documents -- "The Role
of the Federal Government in Distributed Energy" and "The Role of the
Default Provider in Restructured Energy Markets" -- that are available
free of charge.  To access the documents, visit us at our web site --
www.caem.org  
 
After over 6 months of intensive work by CAEM's Distributed Energy Task
Force, CAEM is releasing a comprehensive report on the "THE ROLE OF THE
FEDERAL GOVERNMENT IN DISTRIBUTED ENERGY" prepared by Nat Treadway, a
CAEM Senior Research Fellow, and Ed Reid, CAEM's Senior Technology
Fellow.  
 
The report describes the major Federal government activities that
encourage or hamper the commercialization of distributed energy (DE) and
recommends changes that could allow DE to play a more significant role
as a choice among competing energy services.  The overarching conclusion
of the report is that unless the Federal government takes affirmative
steps to promote DE, the existing policies, regulations, and business
practices will continue to hamper its development.  The report makes a
number of recommendations that will be important to policymakers at both
the federal and state levels of government.  This 70-page report is a
must read for stakeholders interested in distributed energy.  
 
A white paper on "THE ROLE OF THE DEFAULT PROVIDER IN RESTRUCTURING
ENERGY MARKETS" was prepared by Ron Sutherland, a CAEM Scholar, as part
of CAEM's DISCO of the Future Forum.  
 
The paper offers an insightful analysis and critique of the current
models utilized by states to offer default service.  The conclusions are
summarized at the end of the paper, but the main result is noted here.
Each state implicitly adopts a model of competition in its electricity
and gas markets.  This model then influences (if not determines) the
choice of default provider.  The commonly accepted model of competition
permits the local utility to remain a competitor in the merchant
function, where the utility is likely to be the default provider.  In
the restructuring efforts of those few states where the utility exits
the merchant function, an energy supply company is likely to be the
default provider.  Various risks, inefficiencies or non-competitive
elements do not result from the choice of default provider, but from
other elements in the transition process.  Price caps are the major
factor contributing to risks and inefficiencies where the utility or an
independent energy provider is the default provider.  That is, it is not
the default service provider framework, per se, that is responsible for
the risks. The purpose of this study is descriptive not prescriptive,
however a tentative suggestion is offered.  Few customers will require
default service if energy service providers have incentives to offer
service at pricing and other terms that cover costs.  If the need for
default service occurs, customers will most likely obtain service if the
default provider can offer service at pricing and other terms that cover
costs.