Lessons Learned from Requests for Competitive Power Prices

Abstract

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