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The Body Electric

Shedding light on utility deregulation.

No matter how you look at it, electric utility deregulation will not be simple. With California adopting a competitive system beginning in January 1998, at least two major congressional bills pending, and 49 states addressing the issue in some form (including Massachusetts, New Hampshire, Pennsylvania and Rhode Island, which have passed laws), small-business owners may soon face a decision about choosing an electricity provider that could profoundly impact their bottom lines.

But to make sure the decision doesn't put them between a rock and a hard place, entrepreneurs must make their views heard. "Major corporations have the wherewithal to attend hearings. Residential users have clout because they're a big voter block," explains Julie Scofield of the six-state Smaller Business Association of New England. If entrepreneurs don't offer input, Scofield worries, their concerns will be ignored.

According to Betty Jo Toccoli of the California Small Business Association (CSBA), small-business concerns include service reliability (will my lights go on when I hit the switch?), accountability (who will I call for repairs?) and price. The CSBA weighed in on these issues when it helped California lawmakers craft legislation small business can live with. Assembly Bill 1890 gives an immediate 10 percent rate reduction to all residential and small commercial customers of the state's three largest investor-owned utilities. By 2002, there should be a 20 percent rate reduction.

More entrepreneurs need to follow the CSBA's lead. While utility restructuring is in its infancy, the movement is gathering steam and will soon become a pressing small-business issue.

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This article was originally published in the May 1997 print edition of Entrepreneur with the headline: The Body Electric.

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