The Deregulation of Electricity Markets: A Brief History

Monday, July 4, 2016 — Starion Energy

Today, 17 states across the nation have varying degrees of deregulated energy markets. In the future, that number is only likely to grow.

Why is the deregulation of electricity markets such a big deal, and why is it only a relatively recent occurrence? Learn about the history of energy industry deregulation with this quick timeline.

1935: The Public Utility Holding Company Act (PUHCA)

Congress passed PUHCA during the Great Depression era as part of Franklin Roosevelt's widespread trust-busting campaign. Back then, eight utility companies controlled 73% of the country's electrical grid. The act limited the geographic reach and scope of energy suppliers by putting them under state-by-state regulation.

1978: Public Utility Regulatory Policies Act

This act came as part of the 1978 National Energy Act, which itself was a response to the energy crisis of 1973. In an attempt to promote domestic and renewable energy companies along with consumer-based conservation initiatives, this act enabled non-utility generator companies to produce power -- a small first step towards eventual deregulation.

1992: National Energy Policy Act

The deregulation of electricity markets took another step forward in 1992 with a congressional reform of PUHCA. This act expanded the choices for utility companies in sourcing their energy, which aimed to help smaller utility companies compete with larger ones.

1996: Federal Energy Regulatory Commission Order 888

By 1995, electricity delivery cost from investor-owned utilities averaged seven cents per kilowatt hour; two-thirds of that cost came from electron generation itself. Order 888 from FERC allowed for open competition between energy providers in hopes to drive down energy costs, though jurisdiction still ultimately fell to individual state regulation.

2005: Energy Policy Act

This act finally repealed 1935's PUHCA, which seemed no longer relevant to many. Today, electron generation makes up less than half of the costs of electricity, and open market competition, thanks to the deregulation of electricity markets, continues to have an impact on consumer price, choice, and freedom for clean energy.

When it comes to the most efficient and cost-effective method of providing your home with green energy, the long process of deregulation has only just begun. Find out if your state allows for consumer choice in deregulated energy markets and consider your options today.

About Starion Energy:

Starion Energy is an independent US retail supplier loyal to everyday hard-working families, local businesses, and the small communities which we strengthen and empower. We secure the path towards smarter, cleaner energy choices. Our agile working style, resources, and seasoned energy leaders is how we can match people's changing lives with easy plans that yield results. It is our honest top performing personal service and the genuine positivity of our people that impact customer's lives and makes us the go-to long-term energy partner.