We stand on the threshold of a new era in the electric services industry. I deliberately avoid the term "electric utility industry," because the future is not limited to the vertically integrated monopoly utility. Many utilities may already perceive the first cracks in their armor: nonutility generators (NUGs), self-generators, and energy service companies.
Competition is not in the industry's future; it is here now. Further, competition and market forces are not going to magically disappear. Any prudent corporate manager eyeing construction of a new manufacturing plant can list a full array of electricity supply choices. Investor-owned utilities, municipal utilities, NUGs, demand-side management providers, self-generation, fuel cells, photovoltaics (em these options are all available now.
If we have our way in California, consumers will be empowered to a rare level. They will gain the ability, if they choose, to buy generation services from any number of NUGs and pay for transmission and distribution to their site of consumption. Brokers and marketers will develop and offer procurement services to interested consumers, perhaps even offering a bundled price tied to an exogenous index. A concrete manufacturer in California, for example, may be able to buy electricity at prices linked to the market price for concrete. Consumers interested in high-quality service will be able, independently or through brokers, to contract with several different backup and standby sources (em either generators or consumers willing to shut down.
California's "Transition Charge"