What is Energy Deregulation

Energy deregulation is used to introduce competition into the electricity industry. This is done by allowing consumers to decide from whom they buy their electrical power. People generally appreciate a variety of options when they must spend their money.
A few decades ago, options among power suppliers were unheard of. The power market in each state was virtually monopolized. This meant that people had to take the power that they were given, at the price that is was offered, from the source making the offer. The advent of energy deregulation has changed this, giving consumers the power of choice.

Energy deregulation is a state issue. As such, the discussions, decisions, and methods for implementing it can greatly vary. Some states have seen the benefits and have written legislation regarding energy deregulation. Other states have not been so eager to embrace the idea, thereby denying their residents the power to choose.
When it is available, the options provided by energy deregulation may go beyond giving consumers a list of companies from which to choose. Consumers may be able to choose between different types of companies. In California, for example, consumers have had the option to choose between investor-owned utilities, local publicly-owned electric utilities, and independent electric service providers.

The right to choose electricity providers can also empower consumers to support their environmental beliefs. Some people, for example, are against the use of coal due to its negative effect on the environment. These people therefore can choose cleaner energy sources, such as wind or hydro power.
Energy deregulation also provides users with an additional means of recourse when they are not satisfied. A consumer may not be happy with the services provided or she may not agree with an energy company’s business practices. Such individuals can take action by spending their money elsewhere.

When there were no options, many people simply paid their bills and usually took no further interest in electricity. Energy deregulation often results in consumers becoming more knowledgeable about the industry. People tend to know more know about electricity generation, transmission, and pricing. This is true even among people who are in states where energy has not been deregulated.