Lessons Learned from Requests for Competitive Power Prices

Abstract

The market for electricity is gradually opening for competition. This
process is slow and currently proceeding on a state-by-state basis. Some
states are allowing retail access to competitive power supplies for all cus-
tomers . Others are limiting participation to selected consumers in so
called pilot programs or in phases as direct access is introduced over a
period of several years.
At present, competition is restricted to power as a commodit y. A
few states allow customers and/ or their suppliers to provide metering
and billing services at competitive rates. No states allow customer s direct
access to wholesale power markets. This contrasts with deregulation of
natural gas , where large, so called non-core or transportation cu stomers
can purchase directly from wholesale markets.
Experience by large, retail customers with natural gas purcha sing
has lead many to believe that lessons learned in that market are directly
transferable to the retail electricity market. That is not necessarily the
case , especially for government agencies who typically ha ve retail ac-
counts that vary widely in size, location, and service requir ement s. Thi s
article extracts earl y lessons learned by government agencies from their
efforts to procure p ower in competitive markets, and can be in struct ive to
purchaser s in the pri vate sector. It is hoped that these lessons will not
have to be relearned by each agency in each state as deregulation pro-
ce eds .