Top Picks

The way people think about electricity is about to change, thanks to a nationwide effort to restructure the industry. The end result is supposed to be lower prices for consumers and a more competitive marketplace, creating plenty of opportunities for entrepreneurs.

Take California, for example. Competition is scheduled to begin in the Golden State January 1, and 108 companies and individuals have registered with the state's Public Utilities Commission to become nonutility electric service providers. Those registering range from large, established utility providers to small, entrepreneurial ventures. Though the new industry is still in its formative stages, there is one source for entrepreneurs interested in electricity reselling to turn to: the Power Marketers Yearbook, available through the Edison Electric Institute in Washington, DC.

"I think we can lower the price of electricity for our existing customers," says John Kamp, president of Manteca, California-based Kamps Propane. Kamps operates nine stores in California that sell propane gas primarily to consumers in small and rural towns. Kamps' director of marketing, Foster Fluetsch, is also exploring purchasing cheaper electricity from an out-of-state producer.

"If the customer just wants reliable electricity at the lowest possible price, small companies can do better. They have lower overhead and can basically be virtual entities," says Jim Rodier of Concord, New Hampshire-based Freedom Energy Company LLC. His company is one of the few small businesses involved in a pilot project in New Hampshire that gives residents the right to choose the company from which they purchase electricity.

For a small firm to be successful, Rodier says you have to educate yourself about the changes. "I also think it's important to wait until there is more clarity, until you see what the new structure of the industry is going to be."

Rodier adds that waiting also allows small-business owners to avoid initial price-gouging. But once this phase passes, the opportunities in this sector could prove electrifying.

This article was originally published in the December 1997 print edition of Entrepreneur with the headline: Top Picks.