Throughout the world, the electric utility industry is undergoing rapid change. Its traditional attributes—monopoly status, government ownership, and government regulation—are giving way to more complex patterns. In the United Kingdom, for example, most of the industry has been privatized. Competition now sets the price of power, and large and medium-sized customers can already choose their electricity suppliers. By 1998, this choice will be extended to all customers.

The power businesses in Argentina, Chile, and Nova Scotia (Canada) have also been largely privatized, and Australia has taken the first step by corporatizing publicly-owned utilities. In China, India, and Mexico, among other countries, dozens of companies—from Exxon and General Electric to one-person enterprises—are attempting to build generating plants and sell power to utilities and businesses. Independent power producers in the US have built more than half of the generating capacity that has come on-line in the last two years. Wholesale customers now have direct access to all power producers, and California is proposing to extend this access to all customers.

These dramatic changes—and many more to come—will affect us all: customers, who are likely to benefit from lower prices but will also...