Vertically integrated utilities own and control a majority of generation assets and distribution assets serving the California market. The establishment of an ISO lessens the potential for owners of the transmission system to favor their own generation facilities over nonutility facilities in providing transmission access. In California there exist transmission bottlenecks or constraints that might affect the choice of which generators will actually be dispatched.
Information flow is critical to ensuring equal access to transmission capacity.
Allowing the aggregation as well as the individual participation of small commercial and residential customers is vital to ensuring that all consumers have the opportunity to participate and benefit from consumer choice. If customer information is provided exclusively to the utility-affiliated generating company, it could give that company an unfair advantage over other competitors. Over a twenty-four hour period the demand for electricity varies dramatically. Future generation demands will be forestalled even as existing investments in generation are made more productive. PBR offers flexibility and encourages utilities to focus on their performance, reduce operational cost, increase service quality, and improve productivity.