This, in itself, would help reduce wholesale prices. Even more importantly, prices set by supply and demand will send the proper price signals to investors, encouraging the construction of new generating facilities. And, additional generation is the solution to the root problem. This additional generation can be installed rapidly, with existing laws and regulations fully protecting environmental quality. Further, modern electric-generation technologies are cleaner and more efficient than those in use only a few years ago.
Higher efficiencies mean that less fuel is used to produce each kilowatt-hour of electricity.
And, cleaner technologies mean that even the fuel that is burned produces fewer emissions. There are a number of steps that federal and state governments can take to ensure that new generating units can be built quickly and efficiently. For instance, environmental review can be accelerated procedurally, without reducing the participation of knowledgeable intervenors or compromising the quality of the outcome. Government also can make sure that the electric transmission system is fully open and accessible to all market participants, especially new generators. Even with such enhancements, however, new generation will be developed only if we allow the forces of supply and demand to operate unencumbered, tofreely set the price of electricity.