12-21-2009, 12:31 PM
In most states, the utility companies are broken into 2 parts. There is the generation company and the distribution company. Generation is the production of the electricity. Distribution is the power lines, transformers, substations, etc. that bring power from the generation company to the consumer.
In those states, they tend to allow a consumer to purchase electricity from any of a number of providers. The distribution company gets a separate charge for maintaining the distribution - getting the power to the consumer.
Most of the providers in these situations do not actually generate electricity! They simply buy in wholesale amounts from the actual generator of electricity and resell it to their individual customers. They do all the billing to the end user and take the risk of non-payment, etc.
It is actually a little more complex than what I describe, but this should give people a better understanding of how an individual can choose their own electricity provider.
Essentially, this is what Enron did, although they did it at a pure wholesale level, buying excess capacity from multiple generators of electricity and reselling to other wholesalers.
In those states, they tend to allow a consumer to purchase electricity from any of a number of providers. The distribution company gets a separate charge for maintaining the distribution - getting the power to the consumer.
Most of the providers in these situations do not actually generate electricity! They simply buy in wholesale amounts from the actual generator of electricity and resell it to their individual customers. They do all the billing to the end user and take the risk of non-payment, etc.
It is actually a little more complex than what I describe, but this should give people a better understanding of how an individual can choose their own electricity provider.
Essentially, this is what Enron did, although they did it at a pure wholesale level, buying excess capacity from multiple generators of electricity and reselling to other wholesalers.