User:InternetConcepts/Energy Deregulation

Energy Deregulation

Energy Deregulation is the intervention of the government to invoke competition for the purchase and supply of energy. Energy Deregulation allows consumers to buy the exact same thing at a lower price. Most consumers do not even know they have a choice of energy suppliers, offering them a lower price without any service, quality, or product change whatsoever. Energy Deregulation applies to both gas and electricity.

In the early days of distributed power, when our energy needs were first developing, there was only one local company (one local utility) providing us with gas and/or electricity. Consumers were happy to get this service into their homes. There was no competition for these services, and the local utilities set their own prices. No one questioned the prices they were paying.

Recently, our government has introduced the process of energy deregulation. This means that consumers now have a choice regarding the company that supplies energy to their homes. Although the federal government has invoked deregulation, energy deregulation is currently a state by state initiative. As we progress, more and more states are deregulating energy, giving consumers and business alike, a choice for their power.

Energy deregulation gives us the choice of the supplier of energy. What this means is that your local utility will still deliver the energy that you purchase elsewhere. You have the choice to switch energy suppliers, and you can base your choice on the many factors each supplier offers. Such factors include price as well as the "green" content of the energy. Such choices allow us to save money and help our environment by purchasing energy from suppliers who use renewable sources of energy, lowering the impact on our earth.

Incidentally, the local utility will actually benefit when you purchase your energy elsewhere, and they encourage you to do so. The reason for this is because when energy is deregulated in a state, the local utility is not allowed to profit on the energy itself, only on the delivery of the energy. To be clear on this point, you should note that your electric bill (the same holds true for gas) consists of two parts... there is the generation (or supplier) of energy, and the delivery of energy. The generation portion is where the local utility is not allowed to earn a profit. If you do not exercise your right to choose, your energy will be supplied by the default supplier chosen by your utility. This is often a high priced option providing "browner" energy. When you choose an energy supplier, you will receive the same service from your utility.

InternetConcepts (talk) 14:58, 1 March 2011 (UTC)