Electric re-regulation and effects on industrial customers

The US electric utility industry has been under intense state and federal regulation since the mid 1930s. Many of the acts which created the authority for government regulation, both on the state and federal level, are being reexamined. It is imperative that new legislation be crafted to appropriately deal with the different needs of both customers and suppliers in different regions of the country. A one-size-fits-all federal solution cannot effectively be implemented. Many parallels can be drawn between the current reorganization of the utility industry and other, previously regulated industries, particularly the oil business. Several models for industry structure are being proposed. The key similarity between these is the separation of generation and distribution. In the short term, real prices for electricity can be expected to increase. However, in the long-term the benefits of competition will drive prices down and profits up.