There have been a lot of changes in the ways business owners get their energy over the decades. It’s not just the rise of new technologies like solar or even wind that have impacted energy and how we consume it. Even the ways we pay for our electricity and who it is that provides that energy to use have seen some adjustments over the years.
When it comes to consumer choice for electricity, one of the biggest “back-end” changes has been deregulated energy. The types of deregulated energy markets vary from one state to the next, so while one state might enjoy deregulated gas, you might not, but you may have access to deregulated electricity.
So what exactly is deregulated energy? How does this affect you, your energy and how you pay for it, and why are there different deregulated states for energy?
Let’s take a closer look at it all and see.
A Simpler Time With Higher Prices
In the past, the majority of energy Americans got was regulated. While that may sound like it just means the government controlled or oversaw the creation and distribution of energy, this wasn’t actually the case. What it did mean, however, was that there was usually a monopoly of sorts on the energy that people received, meaning they had no choice. After all, if only one person is calling the shots, why should that person be flexible or pay attention to what customers want? The customers have nowhere to go.
In a regulated energy market, one company controls all aspects of electrical generation: the actual electrical generator, whether that is coal, nuclear or hydroelectric, the transformers that receive that energy and distribute it across the grid, and of course, the poles, wires and other means of distributing that electricity to the households or businesses that require it. At every step of the energy creation and distribution process, one company controlled every single aspect. And that meant that consumers had play by their rules.
The Arrival Of Choice
In the 1970s, the government stepped in and started encouraging the break-up of this kind of control, though it did not make it illegal. Different companies stepped in and began competing with each other for consumer dollars, just like any other honest business. This break up of big companies to encourage more competition was called deregulation, and these deregulated energy markets offered more consumer choice for energy.
Many Americans now have a situation where the gas, electricity, or both are deregulated, and there’s a choice of different providers. However, not every state enjoys this. Yet, for states that participate, there’s a lot of consumer choice for energy, whether it’s gas, electricity or both. It means that for people living in the right state, not only do you have your pick of providers for electricity or gas; you may even enjoy different packages, such as locking yourself into rates for one year, three years, or other packages that give you more control over your spending.