Restructuring the electric power industry and bringing competition to gener-ation and retail sales markets would be complicated enough if the industrywere populated exclusively by for-profit investor-owned utilities. The task becomes even more difficult when the roughly 2,900 publicly or cooperatively owned utilities are added to the mix. Taken together, publicly and cooperatively owned utilities were responsible for roughly 25% of the nearly 3,240 billion kilowatt-hours of electricity sold by utilities to businesses and households in 1999. These publicly and cooperatively owned utilities tend to face different forms of regulation from investor-owned utilities. They also are granted special privileges not extended to investor-owned utilities. This special treatment could provide publicly owned and cooperatively owned utilities with advantages over their investorowned competitors and could keep electricity markets from operating as efficiently as possible.