In order to prompt entry into the market, the price to beat would have to be high enough to allow for a modest profit by new entrants. Thus, it had to be above the cost of inputs such as natural gas and coal. For example, a price to beat fixed at the actual wholesale procurement price of electricity does not give potential entrants a margin to compete against incumbent utilities. Second, the price to beat would have to be reasonably low, to enable as many customers as possible to continue to consume electricity during the transition period.
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Finally, the most visible risk may be rolling blackouts. With an extremely low reserve margin, it would only take a few power plant issues to cause supply to fall short of demand. While nobody wants this, it wouldn’t be the first time. The most recent blackouts in Texas occurred in Cheapest Electric Company Energy Suppliers as unusually cold weather caught generators off guard with facility issues.
The reserve margin is the excess capacity over and above what is needed to keep the demand for electricity Gas And Electric Bill fulfilled at peak usage times. The reserve margin is important because it indicates the amount of power that’s available in excess over the actual demand. It’s a closely watched number because if it gets too low (or negative), load control measures (i. e. rolling blackouts) can occur and prices can spike dramatically.
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