Another deregulation fiasco ahead?

In case you haven't noticed, electric service is a tad lessreliable nowadays.

American Electric Power recently asked customers to voluntarilyconserve power. It was a replay of a longer voluntary conservationplea issued by the utility last summer.

What's going on here? It can't be a surprise that it gets hotduring the summer.

AEP blamed last year's near-crisis on a unique combination ofevents - an extraordinary heat wave occurred early in the season,when some generating units were out of service for scheduledmaintenance; an unusually high number of nuclear units in the Midwestand Ontario were out of service; a tornado wiped out sometransmission lines; and there were some unexpected outages in AEP'ssystem as well as others.

This year the company cited the extended heat wave and theunscheduled shutdown of several generating units.

Both summers, AEP got caught with its Cook Nuclear Plant out ofservice. The plant near Chicago represents about 9 percent of AEP'sgenerating capacity.

Billy Jack Gregg, the state Public Service Commission's consumeradvocate, said the utility's recent conservation plea "just shows howtight margins are in the upper Midwest area."

Gregg said reserve capacity has been shrinking in recent years aselectric utilities cut costs to compete in a deregulated market.

Gregg observed that reserve capacity margin is very expensive.

"Basically, it's like an insurance policy - you only want to buywhat you need," he said. "It's cheaper to ask people to cut back inthe hottest time than to build a new plant you may only need forseveral weeks out of the year."

Relief appears to be in sight because new peak units are beingbuilt across the Midwest, Gregg said.

Even so, the industry is facing other troubling issues associatedwith deregulation:

- Some utilities are dealing with brokers who don't have longhistories of meeting their obligations; and

- Utilities are reportedly shipping power over longer distances.Last year some concern was expressed that this practice might straintransmission systems.

Shades of the airline industry after it was deregulated: manyfrills disappeared and fares got cheaper but you risked gettingbumped off your flight and it seemed like every plane left late.

Might we be in the early stages of another deregulation fiasco?

This is a good time for AEP and the state Public ServiceCommission to review our electric reliability insurance policies.

We only want to pay for what we need, but we're addicted to ourmodern conveniences.

Make no mistake: we want the current to keep flowing.