■ he overwhelming long-term trend in the electric and

JL gas industries is one of deregulation, fierce market competition, unbundling of services, and increased consumer choice in energy services. Historically, natural gas companies mostly sold and delivered purchased gas to customers at a price determined by a regulated rate structure that included a bundled host of services. Electric utilities sold electricity that they had generated or purchased under similar arrangements.

While far from fully evolved, the current trend is toward a condition under which the local utility's prime function is the transmission and/or distribution of natural gas or electricity, but not necessarily the sale of the energy commodity. The purchase and sale of natural gas and electricity is becoming more of an independent market function in which the utilities are but one broker among many. It is very conceivable that over the next decade, this trend will be all encompassing, inclusive of the residential market, with newly developed rate structures that are compatible with the evolving conditions surrounding consumer transactions.

Though the trend continues at an accelerated rate, utilities still provide both sales and distribution functions to most customers. Natural gas and electric utility rates are determined through a regulatory process under the jurisdiction of a public utility commission (PUC). The utility periodically applies for a rate case hearing to request rate adjustments in response to changes in economic factors, such as supply, demand, distribution, and market forces that affect the utility's cost to serve.

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Guide to Alternative Fuels

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