What is Energy Deregulation

What is Energy Deregulation?

Over the last several years, a number of states have begun to change the regulations in the energy industry to enhance competition between energy providers. The deregulation of energy has divided the utility company monopolies by separating the production of energy from it’s distribution. This separation creates more competition. Prior to this deregulation, both electricity and natural gas were provided by local utilities or regional monopolies that controlled both the power generation and distribution channels for delivery.

Energy suppliers, working with Energy Service Companies or ESCO’s, now have the ability to provide a variety of choices for service and rates. The concept is to separate or deregulate the production of energy and allow customers a choice as to where they purchase their power (just as they can select their long distance phone carrier). The neighborhood utility company would still provide the power distribution, as they do today over their lines.

From the customer or end user’s perspective, nothing will change. There will be no interruption of services, their current utility provider still maintains service and bills the customer’s account. It is possible that the consumer may receive a separate bill from the energy provider instead of one bill from their utility company.

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