What's Changing?
Electric utility restructuring will change the way you purchase electricity. Here is a brief look how the system evolved and how it is changing:

Electric Utility Industry Traces Its Beginnings to the Early 1920s
In the early part of the century, electricity was generated by independent power generators and distributors who competed for customers and turned the streets into a jungle of power lines. In the 1920s, many large electric power holding companies were formed, and by 1932, the eight largest companies controlled 73 percent of the nation's investor-owned business. By the 1930s confusion in the industry had given way to consolidation, yet there was little effective state regulation, and no federal regulation.

In response to the market abuses by a handful of large companies controlling the majority of the electricity marketplace, Congress, in 1935, passed the Public Utility Holding Company Act (PUHCA). PUHCA set the standards for the organization of electric and gas holding companies and authorized the Securities and Exchange Commission (SEC) to regulate their financial transactions.

Investor-owned utilities (IOUs) are now regulated by the Federal Energy Regulatory Commission (FERC) and state regulatory commissions. They serve three out of four American consumers. The remaining quarter of the nation's consumers are served by municipally owned utilities, rural electric cooperatives or federal facilities.

A Restructured System
For more than 60 years, electric utilities have operated as regulated monopolies. Consumers had no choice but to buy energy from their local utility. That is now changing. Restructuring will open the marketplace to a variety of energy providers, including generators, marketers and brokers. The delivery -- i.e., transmission and distribution -- of power would continue to be provided by the local utility and continue to be regulated. The generation of power will be deregulated. Customers will be allowed to choose their energy supplier, whose rates would no longer be set by a state regulatory commission. Restructuring is designed to create competition among suppliers, give greater choice to consumers, and result in lower electric bills.

Restructuring legislation has been passed in Connecticut, Massachusetts, and New Hampshire. The energy market opened to competition in March 1998 in Massachusetts and in January 2000 in Connecticut. It is anticipated that the New Hampshire Markets will open in Spring 2001.

For more information on restructuring in these three states, go to the following educational websites:

• Connecticut
• Massachusetts
• New Hampshire