Detroit Edison Co. (DE) has received approval from the Michigan Public Service Commission for
10-year sole-supplier contracts for electric power and related services with Chrysler, Ford,...
boards signed an energy services agreement with the power marketer Duke/Louis-Dreyfus (DLD). In fact, this selection was interesting in its own right. Duke/Louis-Dreyfus was partly owned by Duke Power Co. (now Duke Energy), which served western North Carolina (and still does), while the three towns were located within the control area of Carolina Power & Light Co. (CP&L), which serves most of the eastern section of the state.
Shortly after DLD got started on the project, we ran into a major problem. After determining that we could not arrange for transmission service through the towns' power supplier, the city of Wilson, the towns requested to tap into a nearby 115-kilovolt line owned by the control area utility, CP&L. To our great dismay, we initially were denied access to that line. Town officials did not give up, however. After months of waiting for the completion of a system impact study and a facilities-based study, the towns finally were allowed to hook up to the 115-kV line, not at their requested point but further down the line, and build a substation.
A Reason to Celebrate
During this whole process, the news began to spread that these three small towns were attempting to play in competitive wholesale power markets. In April 1996, a Congressional staffer called me to request that the towns tell their story to the U.S. House of Representatives, Committee on Commerce, Subcommittee on Energy and Power, which was then headed by Rep. Dan Schaefer. It was an honor to travel with town officials to Washington as they testified before the subcommittee in May 1996.
In early 1997, DLD officials and I contacted area power suppliers to obtain power quotes for the towns. After a relatively short process, the towns chose North Carolina Power as their new supplier, the trade name of Virginia Electric & Power Co. (VEPCO), which also does business as Virginia Power.
At last, the towns energized their new substation in February 1998. To celebrate, they put up banners in all three towns, declaring a "New Era in Energy," and organized a party at an elementary school in Black Creek - complete with barbecue, speeches, and a school chorus singing patriotic songs. To symbolize the change in electric suppliers, VEPCO and town representatives flipped the switch on a huge switch plate to signal the changeover. The result was a 60 percent cut in wholesale cost of power, which represented a 50 percent cut in overall costs when the amortization of the substation was included.
Meanwhile, another nearby town, Sharpsburg, N.C., had also decided to obtain competitive power supplier bids, in hopes of lowering its electric costs. After fruitless negotiations with the town of Rocky Mount, its local power supplier, Sharpsburg decided to evaluate the proposals from prospective energy suppliers. It eventually chose VEPCO as the winning bidder. And, as was the case with the first three towns, Sharpsburg also had to build a substation, which came online in January 1999. Several months later, Sharpsburg threw its own party. Sharpsburg cut its wholesale cost of power by approximately 35 percent, enabling