Up until that point, explains the Berkeley Haas Energy Institute, most U.S. consumers received their electricity from regulated, vertically-integrated utilities that owned all of their own electricity generation, transmission, local distribution and retail billing and collection services. But that all changed in the spring of 1996 when the Federal Energy Regulatory Commission issued an order requiring public utilities to open up their businesses to competition. The most significant changes to emerge from this “electricity restructuring” process included:
- electric utility companies in some states were forced to split themselves into separate generation, transmission and distribution companies;
- utilities that owned transmission lines were required to offer “open access” to those lines to local power generation companies;
- non-utility generators gained permission to sell electricity to utilities; and
- retail service providers gained the right to buy electricity from generators and sell it directly to consumers.
Against this backdrop, the Dutch-born Krapels, who holds a bachelor’s degree from University of North Carolina, a master’s degree from the University of Chicago, and a PhD from Johns Hopkins University, all in international relations, woke up to a new and career path-altering realization:
“It became clear to me,” he said,” that the foundation for this new healthy, competitive electric market would be transmission.