What You Need To Know About Energy Deregulation

With large winter heating bills looming ahead of homeowners in much of the country, this is the time of year when many people get serious about scouring their electric bills and trying to conserve energy in their homes. But if you’re one of those homeowners looking for savings, energy deregulation may offer you an easier way to lower your monthly bills. Since you may not be familiar with energy deregulation, here’s an overview and the answers to four of the most frequently asked questions on the topic:

1.     How Does Energy Deregulation Work?

Essentially, energy deregulation breaks up the monopoly of public utility companies by dividing energy generation from energy distribution. This means that instead of your utility company deciding which electricity companies to buy power from, you can choose an alternative electric (or gas, in some places) supplier. The power from the company of your choice is still delivered along regular utility lines.

The process of deregulation started back in the 1970s, when the Public Utilities Regulatory Policies Act created a structure for alternative power suppliers. But the movement didn’t really take off until 1992 with the Energy Policy Act. The progression of energy deregulation is gaining momentum even now.

2.     Would I Experience Service Interruptions?

No, there are no interruptions when you switch providers. Because the energy is still delivered to your home through the regular local utility company, you’ll experience no change in your service whatsoever.

3.     What Are the  Benefits of Deregulation and Choosing Your Own Energy Provider?

The purpose of deregulation is to provide consumers with choice and the power to choose.  Instead of having regulated rates, you can choose a company based on the rates it offers. 

Some states have had more success than others with deregulation, which is why much of the debate surrounding the issue isn’t whether deregulation should take place, but rather how it should be structured.

Deregulation also gives you the chance to support energy companies who have values and business models you agree with. You can learn more about the green energy initiatives some companies have in place, or even research their charitable and community contributions.

4.     Where Is Energy Deregulation in Effect?

Deregulation takes place state by state; some states offer supplier choices for electricity, gas or both. There’s a cluster of deregulated states in the Northeast and around the country but the easiest thing to do is either search online for more information about deregulation where you live or simply contact your  local utility company to ask if you have a choice between producers.