A Brief Introduction for Small Commercial Electric Customers

Under traditional monopoly regulation, the generation, transmission, and distribution (see picture) are all provided to you by one utility company. Under retail electric competition, customers can choose their provider of generation.* Your current utility company will still own and maintain the power lines, and you will continue to be billed for those services even if you choose a different company for generation.

In Arizona, the following investor-owned and cooperative utilities will be allowing customers to choose their generation provider (also known as electric service provider):**

Ajo Improvement Company, Arizona Electric Power Cooperative, Arizona Public Service Company, Citizens Utilities Company, Duncan Valley Electric Cooperative, Graham County Electric Cooperative, Mohave Electric Cooperative, Morenci Water and Electric Company, Sulphur Springs Valley Electric Cooperative, Navopache Electric Cooperative, Trico Electric Cooperative, and Tucson Electric Power Company.

Competition will be phased in from now through January 1, 2001. The Arizona Corporation Commission (Commission) must decide various cost and rate issues for each utility before competition can begin in that utility's area. Commercial customers with peak loads less than 1 MW may be eligible to participate during 1999 and 2000 if they aggregate their loads with those of other customers into a combined load of 1 MW or greater.*** (Contact your local utility company for more information about eligibility in your area.)

Electric service providers must be authorized (certificated) by the Commission to do business in Arizona.

A customer must provide written authorization to change service providers. If a customer is switched without written authorization ("slammed"), the new provider must pay the costs of switching the customer back to the previous provider and refund the entire amount of generation-related charges for three months or the period of unauthorized service, whichever is greater.

Electric service providers must provide information on the sources of their generation (coal, nuclear, solar, etc.) upon request.

* Customers choosing a competitive provider for generation may also obtain metering and billing services from a competitive provider.

** Customers of Salt River Project may also be able to purchase competitive generation according to the provisions of legislation.

*** "Aggregation" is the combination of loads of multiple customers. An aggregator is an electric service provider who, as part of its business, combines electric customers into a purchasing group.