This typically refers to electrical service offered to energy clients who produce their own energy. The utility provides a connection for use by the client, but this connection is only used as standby energy when the customer is unable to produce enough energy from their own resources.

The cost of standby service has historically been so high that customers would avoid installing additional on-site generation in favor of making continuous use of utility-provided energy to supplement their on-site generators, even if this resulted in waste. With deregulation, it is expected that these customers will be able to purchase supplementary energy on the spot market at prices significantly lower than traditional standby rates.

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