Document Type

Article

Publication Title

Vanderbilt Law Review

Publication Date

10-1998

ISSN

0042-2533

Page Number

1233

Keywords

duty to serve, public utility, common law, protection of consumers

Disciplines

Common Law | Consumer Protection Law | Law

Abstract

This article addresses the implications of retail competition in public utility industries, particularly electricity, for utility service obligations. After tracing the history of the common law duty to serve applicable to public utilities, the efficiency of utility service obligations in the context of rate regulation is explored. Retail competition, many suggest, poses a threat to utility service obligations. However, regulators can minimize the inefficiency of traditional utility service obligations without sacrificing the benefits of retail competition if they pay attention to the structural efficiency of competitive retail markets. The article advocates imposition of basic service obligations on the DisCo and voluntary procurement of power supply financed through a systems benefits charge in the context of PoolCo retail competition model. In addition, the implications of competition in distribution markets on service obligation financing are explored.

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