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12805 Highway 55 · Suite 212 · Plymouth, MN 55441-3859 · 612.551.1230 · 800.422.0119 JMN) · Fax 612.551.0459 <br /> <br />Executive Summary <br /> <br /> In order to properly address restructuring, it is necessary to know how power <br />systems work, the relationships between generation, transmission and distribution and <br />how those elements work together to create a reliable system, and the economics <br />associated with power systems. The task will be to restructure the electric industry so <br />that it can be operated on a national basis and so that competition will serve a useful <br />purpose for end-use customers in terms of choice, price and reliability. In reality, it will <br />be a complex process which may never be entirely successful. <br /> <br /> The transmission system, as it now exists, was not designed to support major <br />wholesale transactions, which in turn are needed to support retail competition. The <br />system was designed first to transmit power from generation to l°ad centers; second, to <br />provide backup and reliability for the individual utility, and third, and most recently, to <br />support reliability of the regional grid. Bulk transfers to other parts of the country were <br />not considered in the design of the regional system. <br /> <br /> The bulk power system is now at or near its capacity in supporting the current <br />level of wholesale transactions. In its current configuration and condition, the bulk <br />power system is likely not capable of supporting substantial increases in wholesale <br />competition or of supporting full retail competition. The market infrastructure, currently <br />operating on a local/regional basis, will have to change to accommodate competition on a <br />national level. Retail competition will significantly increase the number of transactions <br />and the complexity of managing the generation and transmission system. In light of the <br />fact that each Regional Reliability Council has its unique regional system for <br />transmission access, it is impossible at this time to ensure that there is fair, <br />nondiscriminatory access on a national basis. The current market infrastructure must be <br /> <br /> <br />