Innovative Utility Pricing for Industry

Abstract

The electric utility industry represents only one source of power available to industry. Although the monopolistic structure of the electric utility industry may convey a perception that an electric utility is unaffected by competition, this is an erroneous perception with regard to industry. Electric utilities face increased competition, both from other utilities and from industrial self-generation. The paper discusses competition for industrial customers and innovative pricing trends that have evolved nationally to meet the growing competition for industrial sales. Cogeneration activities and the emerging concepts of wheeling power are also discussed. Specifics of industry evaluation and reaction to utility pricing are presented. Also enumerated are examples of the response various utilities throughout the United States have made to the needs of their industrial customers through innovative rate design. Industry/utility cooperation can result in benefits to industry, to the electric utility and to all other ratepayers. This discussion includes examples of successful cooperation between industry and utilities.