Independents expand presence in power market. (independent power producers) (Industry Overview)

Independent power producers are poised to take a significant bite out of the profits of public utilities.

Regulators already require utilities to solicit electricity from non-utility generators amounting to at least 5 percent of peak demand, but a recent report from John Hancock Financial Services shows that utilities are exceeding that figure on their own.

The sale of electricity from independent power producers to utilities grew at an average annual rate of 30 percent in the 1980s, according to John Hancock. The investment firm projected that the share of electricity sold to utilities should increase from 47 percent of the independents' capacity in 1989 to 61 percent in 2010.

"They do represent competition," said Michael Monahan, spokesman for Boston Edison. "We recognize that non-utility generators are out there and a part of the current and future energy supply."

A utility does not make a profit when it purchases energy from an independent and resells it to the …