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Deregulation of the Electric
Utility Industry
1. Customer choice-The opportunity
for consumers to choose among electricity
suppliers as a result of deregulation. See Deregulation, Retail
competition.
2. Deregulation - A process of
reducing or removing regulations to increase competition among
electric utilities and to give consumers choice among electricity
suppliers.
3. Direct Access -- With full
deregulation of the electric utility industry across the nation, and
some 24 states have already made changes that allow for direct access,
home and business owners will be able to choose who provides
electrical energy for them. While all investor owned electric utility
companies serving North Dakota favor full, open, and complete direct
access competition, there is little support from the rural electric
cooperatives or from the municipal power suppliers.
4. FERC
Orders 888 and 889 -- Hoping to drive the cost of electricity down,
FERC issued orders 888 and 889 to expand competition in the wholesale
electric industry. These rules require utilities under FERC
jurisdiction to file their transmission price lists and offer
comparable transmission services to eligible third parties. With the
implementation of these rules, the investor owned transmission system
was converted from a private carrier to a common carrier. Anyone with
excess energy can place their surplus on the common carrier
transmission system for delivery to their customers in exchange for
payment of the published fee.
These FERC orders have been
responsible for generation and transmission deregulation and for power
marketers joining the electric energy business. They have also created
new problems for integrated electric utilities to face, such as
stranded costs and system reliability issues.
5. Retail access - A market in which
electricity and other energy services are sold directly to the end-use
customer.
6. Retail competition - A market
structure in which customers have the opportunity to purchase
electricity from a number of different providers.
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