July 1998


Straight facts on deregulation

Understand issues and trends of the new electric utility industry

Lopez, J. A., Houston Industries Retail Energy Group

The electric power industry was originally regulated so that the government could guarantee enough customers to ensure running large generators at maximum level. In the 1930s, U.S. federal and state officials granted electric companies monopoly status in an effort to create a reliable and efficient electrical system, and to support the economy's growth. Deregulation is transforming the structure of the electricity industry from a regulated monopoly to a market-driven system (Fig. 1). This means that all customers, regardless of size, location or amount of electricity they use, will be able to choose their provider. History has shown that open competition in previously regulated mark

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