Most electric utilities currently thrive in a regulated industry characterized by service reliability, defined market or fixed territorial service areas, and price setting by regulatory commissions. These industry characteristics provide the kind of stable environment sought by purchasers of utility securities. A competitive environment leaves little room for a noncompetitively priced unit of production. Whether a production unit is a unit of energy apparently cost-free such as wind, water, or sunlight, or a fossil fuel such as coal, the cost of the conversion process of that energy source will dictate an electric producer's choice of fuel. Consumers usually choose the least costly product, especially if the quality of the product does not differ among manufacturers.
Electricity is a generic product and brand loyalty has little, if any, impact.
During the seventies and eighties, the writer's administrative, research, and policy duties included a public utility response to regulation, such as the Public Utility Regulatory Act of 1978. 2601 et seq. 2601 et seq. The Alliance for Competitive Energy, supra note 4. The Edison Electric Institute is a nationwide investor-owned electric utility trade association based in Washington, D.C. 11.