D.C. Momentum is building fast to deregulate the electric utility industry, enabling retailers to buy electricity on a competitive basis. This could significantly lower our power rates, but it will not occur without a major effort by the entire retail industry. We are contending with major forces that want to either protect the status quo or establish regulations for the new competitive power industry that would prevent businesses such as ours from lowering our electricity costs.
Competition introduces incentives to streamline operations and reduce costs.
Electric power is different from the other utilities because electricity cannot be stored. It is produced, distributed and consumed concurrently. As a result, economies of scale are paramount. In a monopoly environment, utilities have offered the lowest rates to users that consume large amounts of electricity at a single location, such as industrial plants. If we are successful in our efforts to allow our electricity use to be pooled across all our stores, food and other retailers will be able to bargain for the economies of scale we deserve.