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Power Marketer
Back in the days before deregulation, the only players in the
utility industry were integrated companies -- companies that owned
generation, transmission, and distribution facilities. They not only
generated the electricity, they transported it and delivered it to
your home and business.
Now comes deregulation causing the
formation of a host of new companies and organizational structures, of
which, the power marketers are the fastest growing. They purchase
blocks of electricity from whomever will sell it, and they resell it
to large commercial and industrial users by using the existing
transmission and distribution grids.
During 1996, power marketers provided 231.8 million megawatt hours of
energy - energy equivalent to the needs of 22.1 million homes. Last
year, during just the first nine months of 1999, this group provided
1.9 billion megawatt hours of energy - energy equivalent to the needs
of 243 million home.
Stranded costs
A portion of your monthly electric bill is to pay for the energy
you use, while another portion is to pay for infrastructure--the
transmission lines and distribution system--that brings the
electricity to you. With the sale of blocks of energy by non-utilities
allowed under deregulation, the electric utility companies will have a
difficult time recovering their infrastructure costs. Costs not billed
in block energy sales become "stranded" and are a serious
concern to the investors in electric utility companies. It is
important that the Public Service Commission allows stranded costs to
be recovered from energy consumers.
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