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Responding to Change
In the 1990's, the electric utility industry experienced tremendous change in structure. The industry witnessed rapid restructuring as many diverse competitors entered the marketplace to buy and sell power at wholesale rates and as some customers began choosing their own electricity suppliers. Consequently, these regulatory and structural changes have increased competition to fulfill customers' energy demands.
As a result of this restructuring and competition, Western rose to meet the resulting challenges by streamlining functions and reorganizing. We have become more flexible while maintaining our focus on long-range planning to identify and prioritize major capital expenditures. We want to ensure that we, as part of the Federal power complex, can meet the pressures of the new marketplace.
To accomplish this goal, we have begun restructuring our marketing and transmission functions, assessing available transmission and unbundling services (see Ancilliary services) for new customers to participate in the deregulated environment.
Some changes Western has made were initiated by a set of regulations (orders) issued in April 1996 by the Federal Energy Regulatory Commission, specifically FERC Orders No. 888 and 889. These orders permit competition in the electric utility industry through broader access to transmission systems. The open access transmission rules require utilities to deliver power from other utilities and generation sources to wholesale customers.
Another way we met the challenge was to strengthen our partnerships with generating agencies to manage power delivery costs and to improve power system reliability and efficiency. These efforts have resulted in agreements from customers to provide advance funding for operation and maintenance expenses.