Competition Has Accelerated Competition in generation and wholesale electricity markets has been accelerated by the presenceof a growing number of non-utility generators, who supplied 60 percent of new electric generation in 1995. Power provided by non-utility generators increased by roughly 115 percent over the last five years. A growing number of power marketers and brokers are competing to sell electricity as well. Nearly 340 marketers sold enough power to serve theequivalent of 63 million households in the first quarter of 1997 alone this from an industry that didn't even exist several years ago. The Important Role of the States State public utility commissions regulate utilities' prices and services to retail consumers homes, businesses, and industries.
States also regulate the level of profits that utilities can make.
This compact has provided one of the most efficient, reliable, and lowest-cost electric systems in the world. Under the compact, utilities are granted service territories in which they have the exclusive right to serve retail consumers. In exchange for this franchise, utilities have an obligation to serve all consumers in that territory on demand. This means that utilities must ensure that there are enough generating plants and transmission and distribution systems to serve all their present and future customers. This franchise enables highly capital intensive utilities to raise the financing they need, spread out recovery of their costs over time from a stable customer base, and increase efficiency through economies of scale and differences in customer usage patterns.