Electric companies may face competition.Several states are considering proposals that would allow at least some customers to have the choice of purchasing power Purchasing Power
1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase.
2. from sources other than their local electric company, indicates Robert Burns, a senior research associate at the National Regulatory Research Institute, Ohio State University Ohio State University, main campus at Columbus; land-grant and state supported; coeducational; chartered 1870, opened 1873 as Ohio Agricultural and Mechanical College, renamed 1878. There are also campuses at Lima, Mansfield, Marion, and Newark. . In a practice known as "retail wheeling," a customer in Ohio could shop for the best deal on electricity and decide to buy from a generating company in Indiana Indiana, state, United States
Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). . The Ohio customer's local utility would be required to transmit To send data over a communications line. See transfer. the purchased power.
In Nevada, retail wheeling already is available for some large industrial customers. State regulators in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). have proposed rules that would give the state's largest industrial customers the right to shop for electricity starting in 1996; commercial customers 1998; and all residential customers starting in 2002.
The reasoning behind retail wheeling is relatively simple, Burns explains. Under competitive pressures from other companies, electric utilities will be forced to become more efficient and cost-conscious. As a result, costs to consumers should go down. "In the long run, I think retail wheeling could benefit all consumers. But there are some serious problems that need to be considered in the short run."
For example, industries will be the first allowed to try retail wheeling because of the large amount of power they purchase, If utilities lower prices to keep their large industrial customers--or to lure lure
the skin-covered object which runs on a monorail on a Greyhound racing track and which the dogs are schooled to chase. The lure must be kept 30 to 40 ft ahead of the leading dog so that the field is stretched out. customers from other utilities--they may be tempted to pass on higher rates to residential customers.
Burns warns that "price discrimination is a very real possibility" and he argues that state utility commissions need to ensure that homeowners aren't forced to make up for cost slashing slash·ing
1. Bitingly critical or satiric: slashing wit.
2. Dashing; pelting: a slashing hailstorm.
3. done in the industrial sector. One solution is to legislate To enact laws or pass resolutions by the lawmaking process, in contrast to law that is derived from principles espoused by courts in decisions. price caps that would keep utilities from putting an unfair burden on their residential customers.
Eventually, homeowners may be able to share in the electric company competition. Instead of negotiating individually with companies, though, residential customers probably will join large co-ops that will search for the best rates for their members. That may take several years "simply because the cooperatives necessary for homeowners to take advantage of wheeling don't exist yet." Some analysts believe residential customers never will be allowed to participate in retail wheeling, partly because utilities need a protected, core base of customers to guarantee income that will pay off capital debts such as power plants.