East-West Center: IPP systems fail to manage power supplies

Much as utility or monopoly systems have failed to manage a country's electric power system effectively, the newer business model in the industry, known as independent power producers (IPPs), also has proven to be a failure. So says the East-West Center, Honolulu, in a recent report. Analyst Ronald E. Hagen says the term IPP is misleading, because the type of power supply system that has emerged in this decade is not truly independent but rather is based on long-term contracts for both fuel supplies and power purchases. That this system has failed should be no surprise, he says. "Contract power systems are grounded on a sequence of long-term contracts that are often i...

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