The enactment of the Energy Policy Act Of 1992 continues to bring 

about tremendous change in the national electricity structure. The 

deregulation of the country's utilities has prompted public power 

entities to offer new, creative ways to help reduce electricity costs. 

    Public power systems are now forming marketing alliances with other 

utilities or swapping power with utilities that have peak demand curves 

opposite theirs. For example, Florida's Jacksonville Electric 

Authority, Georgia's MEAG Power, and South Carolina's state-owned 

Santee Cooper have formed The Energy Authority, which buys and sells 

wholesale power for its member organizations. Four municipal utilities 

in New England - Braintree Electric Light Connecticut Municipal 

Electric Energy Cooperatives Taunton Municipal Light, and Reading 

Municipal Light - recently formed a marketing alliance Energy New 

England that combines their wholesale brokering efforts.

    Elsewhere the Kansas City Kansas, Board of Public Utilities teamed 

up with a power marketer to sell excess energy, while Arizona's Salt 

River Project is providing surplus winter electricity to a power 

marketer in exchange for power during the summer. Also, the Orangeburg, 

S.C. Department of Public Utilities signed a new market-based 

electricity supply agreement that will reduce its costs by $3.5 million 

a year over a four-year period. And 27 Iowa utilities shaved a 

collective $6.5 million to $7.7 million off their yearly electric bills 

by negotiating a new power supply contract. 

    Other public power systems are facilitating customer choice in 

advance of state regulatory directives. For example, California's 

Sacramento Municipal Utility District is phasing in direct access to 

some customers and plans to offer a[[ customers that choice by 2002. In 

Pasadena, the local public utility will provide customer choice in 

2000. The Clark Public Utility District in Ephrata, Wash., will be 

offering its largest industrial customers a choice by 1998.

    Two other restructuring concepts are important. One is 

municipalization, or forming a new public power system, which can buy 

power on the cheaper wholesale market. The second is aggregation, in 

which a group of energy buyers pool their energy needs in order to make 

the group more attractive to sellers of wholesale power and, therefore, 

to qualify for lower electric rates. Aggregation can involve groups of 

residential customers, small commercial customers, or large energy 

users with multiple locations. It lowers the power provider's 

transaction costs, making doing business more feasible and profitable, 

according to a recent study by Kay Guinane, a former attorney with 

Environmental Action. 

    Industrial energy users are often the driving force behind 

municipalization because they are aware that municipal systems are free 

to search for the best deal for their customers. Here are some recent 

efforts to form new municipal utilities: o Total Petroleum Inc., which 

has a refinery in Alma, Mich., began supporting municipalization in 

1994 after the area private utility refused to grant it interruptible 

rates under conditions acceptable to the company. 



* Total Petroleum believes it's been overcharged by $3 million since 

1994.



* Littleton, N.H., estimates that it can realize savings of more than 

$1 million a year by switching suppliers. For instance, the city has 

discovered it can buy power for $0.03 to $0.045, compared with the 

$0.64 it now pays.



*  In northern New York, 22 towns and villages plan to join forces to 

create a public power utility to serve parts of St. Lawrence and 

Franklin counties. By going municipal, the towns would save 25 to 40 

percent. Each community would form its own municipal system. These 

systems would then be combined and operated as one utility. In the 

aggregation arena, public power systems are also blazing the trail:



* The Los Angeles Department of Water & Power teamed up with Revelation 

Energy Resources to provide power on a wholesale, nationwide basis. 



* Dakota City and South Sioux City, Neb., have entered agreements that 

will save up to 15 percent on heating bills. The two cities will 

aggregate the load of customers and buy natural gas at wholesale rates. 

They will then resell it to another utility, which will provide 

distribution and billing.



* Seattle City Light inked a deal with Nordstrom's, the upscale Seattle 

retailer, to provide power to 38 of its California facilities in 1998. 

Earlier, Seattle City Light made a similar arrangement with the 

Association of Bay Area Governments, an agency Of 104 local governments 

in the San Francisco area. 



 City Public Service (CPS) of San Antonio offers bill aggregation for 

large customers with more than one facility. The city will wheel power 

for industrial customers; San Antonio offers levelized billing for 

commercial customers and electronic-fund transfers for easy payments. 

The CPS web site is located at http://www.ci.sat.tx.us/cps.