Yes, cooperatives are big enough to shop in the power market.  Some may need friends along to get the best deals, but the market is no longer the exclusive playground of the large buyers and sellers.  Not too long ago, the “market” consisted primarily of 2 types of business arrangements:

1)      Transactions between larger utilities – who owned generation; and

2)      Transactions between larger utilities and the smaller utilities – including cooperatives, municipals, and smaller investor-owneds – that were physically within the geographic area controlled by the larger utilities.

“Controlled” is the operative term of the second item.  The larger utilities typically owned the transmission systems and were able to limit (or render uneconomical) transactions by other parties over their transmission systems. 

Changes in law and regulation have opened the door – and the transmission system – to many more buyers and sellers.  They have also paved the way for competition among the large utilities, so there is a market to which cooperatives can turn to purchase power or sell excess generation.  This competition has also affected the size of transactions that can be made economically.  Where large transactions were once the norm and anything that deviated from the norm paid a penalty, today competition has forced suppliers to work harder and become competitive with even smaller quantities.

 What this means is that many cooperatives are big enough to command good prices on their own, and, if co-ops band together, the number of cooperatives in the group does not need to be as large as in the past.

 For additional information, contact Elaine Johns at 1-888-999-8840 or e-mail her at elaine.johns@enervision-inc.com.