Energy Supply Choice
Historically, 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.
Competition 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 customers.