Deregulation and opportunities for industrial customers

Abstract

If changes proposed by the public utility commissions of California, Massachusetts, New York, New Hampshire, and many others are accepted by the US FERC, consumers in these states are going to see some radical changes in their electricity services. Monopoly power will fall away and consumers will be free to choose new electricity suppliers. The potential market value for this emerging sector of power industry is unknown; however, leading trade magazines and other industry analysts expect the market value of power transactions to reach $200 billion. Net cost savings for the end-use customers may range anywhere between $5 billion to $20 billion. However, this saving would be for those customers who will exercise their choice. This paper presents a case study which suggests ways that large industrial customers can better manage their electricity purchase price in a competitive power industry. It also emphasis the requirement of comprehensive consideration of electricity costs and rate tariff, understanding of necessary tools to predict future price transmission and generation data, and through regulatory changes, projections, understanding of plant process.