Energy Deregulation

What is Energy Deregulation?

It used to be that people didn’t have the freedom to choose where they bought their power from. Every state had basically one source of electricity or gas and you had to buy from them, regardless of price.

Now however, some states have started to deregulate power. This means that you have the freedom to choose another utilities company to buy power from.

What Makes Deregulated Power So Controversial?

For years utilities like gas and electricity have been controlled by the government. This ensured that health and safety measures were properly monitored, but it also unfortunately created a monopoly of power that made it possible for prices to rise without anything to check or lower them.

Deregulated power creates independent companies that provide competition, and it’s the first time that energy has been deregulated.

Deregulation Doesn’t Mean Using Different Power

Just because power is deregulated it doesn’t mean that there are independent companies popping up all over with access to different power sources. All the power generally comes from the same places.

What deregulated means is that these new independent utility companies offer different pricing options and policies, some of which are oftentimes a better fit for you depending on your circumstances or location.

What Does Deregulation Mean For You?

This is how it all works. You have the companies that provide energy or natural gas, which they in turn sell to all the available retail suppliers like the traditional government suppliers and the new independent suppliers in deregulated states.

These suppliers sell their utilities through your familiar local utilities provider who then sends the power directly into your home or business.

The Benefits of Deregulated Energy

Consumers now have a choice about what company provides electricity and gas for their homes and businesses.

This ultimately lowers the cost of utilities and products because suppliers are now competing with each other.

The Future of Deregulated EnergyAs of now, not all states allow deregulated energy, and it might take years until the entire United States passes the necessary laws making deregulated power legal.

So far only 13 states give people the choice to find an alternate gas or electric utilities company to obtain power from and 18 states have yet to even make deregulated power legal.

How Do you Get Your Utilities?As a consumer, you might not even notice the difference at first. The utility company in your area is still responsible for the distribution of the power to your home regardless of the supplier you choose.

However, the supply price isn’t set by that same utility provider anymore. Depending on where you live, you may still continue to be billed by your utility provider, but you will see a mention of your new supplier. Or, in some cases you will be billed directly by your supplier. 

How Will Deregulated Power Affect the Economy?

Deregulation opens up a whole new job market and a way to make money. It’s also lowering utility costs somewhat and creating healthy competition and new jobs.

However, deregulation of energy is still so new that we don’t really know the full effect it will have on the long-term utility distribution system in the United States.

Coming Soon to a State Near You?

If you’re unsure about the deregulation laws in your state, look it up today and find out if there are alternative energy options available for you.