How A Major Purchaser Negotiated Interrelated Power Contracts More Than 20 Electric Utilities Were Involved

Abstract

This article illustrates how electric power purchase terms, appro-
priate for the evolving electric environment, were negotiated with dif-
ferent utilities to serve an industrial load at multiple sites. Retail com-
pet it ion between alternate power suppliers is either none xistent or
strictly con strained today in the states where these facilities are located.
However, as these states eventually follow the lead of others, this will
change in the next se veral years .
The article is written for those with the task of acquiring power in
the emerging environment, particularly those with little or no experi-
ence in acquiring power in an environment allowing competitive access
to multiple energy supplier s.
It includes what each of the sides in the negotiations held as im-
portant; a s u m m a ry of the key contract features; and a recap of how
these features balance the conflicting desires of the parties allowing
each side to achieve those goals they value most highly . Appended to
the article is a reference list of questions an industrial purchaser may
find helpful in negotiating electric service in the evolving electrical en-
vironment.