What is Energy Deregulation?

Over the past two decades, energy deregulation has ushered in a new era of competition and consumer choice. Just think of it, only 20 years ago options among power suppliers were unheard of! In the early 1990’s, open access to the wire system that delivers electricity to the commercial and residential market was guaranteed by Federal legislation. This is when our government said, “Yes!” we are now opening the floodgates of wealth to all who want to go after it in this amazing market that already brings in $200 billion in annual revenue.

Up until this time, the power market in each state was virtually monopolized. Gas and electric was distributed inefficiently across the country making prices fluctuate wildly. The deregulation of the electricity and natural gas industries has created vast opportunities for businesses and residential customers to reduce total expenses by enabling customers to select suppliers for the best combination of price and reliability.

The idea behind deregulation is that competitive markets benefit the consumer. It forces the supplier to compete on price and it allows them to create unique products and services. This is exciting for consumers because before deregulation, you simply paid the regulated rate just like everybody else. Energy is a product that is unconsciously purchased and habitually used. With a new awareness in the marketplace for different options, consumers are more excited than ever to make smart choices for their utility needs!

The fact is we now know that deregulation is working as we have seen it being implemented on a state-by-state basis over the last few decades. This is different than the long distance telephone deregulation that was done on a national level all at once. As many as 34 states (and growing) have some form of deregulated energy and these states are reaping the benefits of competition and have even written legislation regarding Energy Deregulation.