Energy deregulation continues to increase across the United States. More states than ever are creating deregulated energy markets to provide residents and business owners the power to choose their energy provider.
Learn more about deregulated energy markets and the amazing benefits by reading this beginner’s guide to understanding energy deregulation.
What is Energy Deregulation?
Energy deregulation alters the current energy market by encouraging competition to prevent monopolies. Competitors purchase energy from producers and create customized packages, specifically regarding rates, terms, and products, to sell to customers. Customers review multiple providers to choose the best energy provider and package for their home.
Energy deregulation began advancement during 1992 when the National Energy Policy Act was created, which allowed competitors to enter the energy market. Deregulation gradually increased until an established retail market for energy providers was created.
Currently, 16 states possess deregulated energy markets, and other states feature partial energy deregulation involving either natural gas or electricity. No state offers complete deregulation, but Texas presents the closest opportunity with over 85% of the state allowed to choose energy providers.
Energy Deregulation Process
Energy deregulation requires providers and utilities for purchasing and distributing energy to customers.
Providers purchase energy from producers and create competitive packages to sell to customers. Providers are responsible for advertising specific rates, terms, and products while offering excellent customer service to attract, earn, and retain customers. Utilities deliver energy to customers using existing infrastructure and distribution systems, including wires, pipelines, meters, and transformers. Additionally, utilities manage energy maintenance, including reading meters and solving emergencies, such as power outages.
Deregulated energy markets involve providers and utilities working together to supply energy to homes and businesses.
Energy Deregulation vs Energy Regulation
Energy regulation presents the alternative to energy deregulation. Regulated energy markets are monopolized by utility companies, who completely control the prices and processes for selling energy to customers. Energy regulation eliminates a customer’s ability to choose by offering only one energy provider featuring one price and product.
Energy deregulation opposes regulation by allowing customers to review multiple providers to select the right price and product for powering their home or business.
Understand the primary difference between deregulated and regulated energy markets to recognize the amazing benefits of energy choice.
Benefits of Energy Deregulation
Energy deregulation provides numerous benefits for customers.
Power to Choose
Energy deregulation grants customers the power to choose energy providers. Deregulated energy markets feature multiple providers offering varying rates, terms, and products, meaning customers choose suitable providers based on personal needs, specifically budgetary preferences and environmental impact.
Energy deregulation means enjoying the power to choose, effectively increasing a customer’s control over their home and budget.
Monthly Savings
Energy deregulation earns customers monthly savings. Every energy provider offers a different rate, allowing customers to choose an affordable rate for them to reduce energy expenses by an average of 20% every year.
Deregulated energy markets also customize experiences by involving two different payment plans: fixed and variable. Fixed rates secure energy prices over an extended period of time, usually including contracts lasting anywhere between 6 and 18 months. Variable rates fluctuate based on market demand to either decrease or increase prices. Fixed-rate payment plans are preferable options because they allow customers to avoid market fluctuations during high demand to improve budget certainty.
Additionally, energy regulation encourages competition, which directly benefits customers. Competitors are required to develop premium energy packages by lowering prices and providing excellent customer service to attract, earn, and retain customers.
Environmental Improvement
Energy deregulation offers advanced opportunities for improving the environment. Traditional forms of electricity, specifically fossil fuels, emit carbon dioxide and other harmful gases during production, increasing atmosphere pollution and causing global warming. Green energy offers an environmentally-friendly alternative featuring many benefits, including:
- Avoiding releasing pollutants to improve air quality and public health
- Limiting greenhouse gas emissions to combat global warming
- Reducing your home’s carbon footprint to guarantee a better future
Energy providers showcase a percentage of green energy supplied by their business to allow environmentally-conscious customers to affordably use green energy by bypassing expensive technology and equipment investments.
How to Change Energy Providers
Access the amazing benefits of energy deregulation by understanding the process for changing energy providers.
Determine Your Current Rate
Determine your current rate to ensure you receive a better deal. Reference your monthly bills and yearly statements to calculate your average energy rate based on kilowatthours of power. Understanding your current rate allows you to confidently select an energy provider to save you money.
Evaluate your current contract as well to verify you’re prepared to switch. Check your contract length and penalties for leaving early to understand whether you’re able to change providers.
Review Prices, Payment Plans, and Products
Review prices, payment plans, and products of multiple energy providers to choose the perfect option for your home and budget. Use your calculated average to compare electricity rates in Texas and locate cheaper options. Remember to choose a provider featuring a fixed-rate contract to ensure savings. Lastly, search for green energy providers if you’re interested in improving your environmental impact.
Find prospective energy providers for your home to benefit your budget and meet your preferences.
Confirm a Provider’s Reputation
Confirm a provider’s reputation to receive excellent customer service and assistance. Deregulated energy markets encourage competition, meaning competitors are required to offer lower prices and better customer service to earn customers. Contact references, including friends and family, and speak with an energy provider’s representative to assess customer service skills, specifically regarding competently answering questions, effectively solving complaints, and purposefully prioritizing a customer’s needs.
Change Energy Providers
Change energy providers by selecting the right option for your home. Create a contract outlining rates, payment plans, and products. Contact your old provider, either you or your new provider, to inform them of the switch. Finally, receive your new bill to officially change providers and begin earning the money-saving benefits.
Energy deregulation offers amazing opportunities for customers to choose energy providers, save money, and improve the environment.
Understand the process of changing energy providers to earn the excellent benefits.
