utilities have had exclusive rights to serve an area in return for
meeting an obligation to provide energy to all consumers in that service
territory. They were responsible for building and operating generating
stations or contracting with wholesale suppliers to provide enough power
to meet the changing needs of their customers, constructing and
maintaining transmission and distribution lines to deliver energy
from the generating stations and installing and reading meters.
Most people recognized
that a regulated utility monopoly could build and operate an electric
power system more efficiently. If many electric companies had built
their own competing power systems, services would have been
unnecessarily duplicated. Our streets and highways, for example, would
have become clogged with power lines built by different electric
companies. Allowing regulated monopolies to serve the public also helped
the United States build the world's most advanced and reliable electric
system. In part, this is because electric utility monopolies have been
required by law to maintain the capability to provide power to all of
their customers at any time at the flick of a switch.
All utility costs were
included in the state-approved rate charged by the utility company.
Customers received one bill for the entire package of services. However,
changes are occurring in how electricity will be sold.
Since many other
monopolies have been deregulated over the past decades, various parties
felt it was time for change in the electricity business. Healthy
competition among power suppliers may result in lower prices and new,
innovative services for many businesses and residences. However, it is
important that all competitors are competing on equal terms and that
you, the customer, can make an "apples to apples" comparison
of their offers.
is designed to increase customer choices and create product and service
innovations. Properly done, deregulation can be good for the consumer.
However, if done improperly, it could lessen reliability, threaten the
environment and harm our economy, while delivering few benefits to
Asked Questions about Energy Choice