Power Biz 101
There Are Thousands Of Electric Power Suppliers Competing In Today's Markets, And the Number Is Increasing.
The U.S. electric power industry is becoming increasingly diverse and includes any entity producing, selling, or distributing electricity. In today’s electricity markets, there are "traditional" electric utilities, such as shareholder-owned companies, electric cooperatives, and government-owned utilities. There are also many new electricity suppliers that have emerged as competition advances and that are vying to compete in wholesale and retail electricity markets.
- Shareholder-owned electric companies are tax-paying businesses that are highly regulated and are financed by the sale of stocks and bonds to the general public.
- Cooperatively owned electric utilities are eligible for subsidized financing from the Rural Utilities Service (part of the Department of Agriculture), and are generally unregulated and exempt from paying federal income taxes.
- Government-owned electric utilities—including municipal systems, public power districts, state projects, and federal utilities—are generally unregulated. Municipal utilities are owned by the municipality in which they operate and are financed through municipal bonds. Federally owned utilities are involved in the generation and/or transmission of electricity, most of which is sold at wholesale prices to local government-owned and cooperatively owned utilities.
- Non-utility generators include cogenerators, small power producers, independent power producers, and merchant generators. In 2005, electricity generated from non-utility generators accounted for 35 percent of the total electricity generated in the United States.
- Energy service providers include corporations, generators, brokers, utility generation subsidiaries, or any other entity licensed to sell electricity to retail or end-use electric customers, in a competitive market, using the transmission or distribution facilities of an electric distribution company.