What is Deregulated Energy?

1.75K views
0

Most of us never think about where our energy comes from. We turn on the light, or flip on the stove, and we expect power and gas to rise to our beck and call. Because we trust our energy providers to get the job done, and to make sure we are adequately provided with power. Additionally, for most of recent history, our energy providers were tightly regulated by the government. Because electricity and natural gas are seen as requirements for living, just like water, they were seen as too important to leave up to the changes of the free market.

However, thanks to changes in the laws, there are several places throughout the United States where states have begun to deregulate energy monopolies. In fact, DeregulatedEnergy.com has a full list of which utilities have been deregulated in which states.

Suzanne Changed status to publish March 18, 2021
0

The name is fairly self-explanatory; deregulated energy is when a monopoly (typically held by the government) is loosened to encourage more competition between energy providers. If, for example, a region’s energy is provided entirely by a single provider that has government sanction, then deregulation would allow other energy companies to offer their own services as competition.

In theory, this deregulation serves the customers. Because while a monopolized energy supplier is reliable and traditional, introducing competition into the market gives customers more options to choose from. This makes it possible for people to choose the least expensive provider from a choice of several, or to pick an energy provider whose policies and sources they approve of (if, for instance, someone wants to buy their energy from a solar power provider, instead of one who may offer lower rates, but uses coal-fired power plants).

While the theory of competition is good, there are still locations in the U.S. who have held off deregulating their energy. Because, as has been shown in the past, what works in theory and what works in practice may be two different things.

Suzanne Changed status to publish March 18, 2021