A deregulated market often benefits consumers by allowing them to compare rates and different contract structures when choosing their utility provider.
It wasn’t until the 1970’s that the idea of deregulation came into play and began restructuring the energy industry.
1. Regulated Vs. Deregulated Energy Market
Traditionally, regulated markets existed across the US. But in 1970s, with the arrival of the Public Utilities Regulatory Policies Act, restricted customer choice became a thing of the past. More than two decades later, the passing of the Energy Policy Act opened the market further with goals to increase energy efficiency, along with the use of renewable energy. Since then, new rate-making standards were created and deregulated markets spread across various states.
Regulated markets still exist as the United States stays fairly divided on deregulated vs. regulated electricity markets. In regulated markets, utility companies have complete control as they own and operate all electricity. The good part of this market comes in the form of stable prices and long-term certainty, as utility providers must abide by electricity rates set by state. On the other hand, consumer choice is limited.
Deregulated markets allow retail electricity suppliers to set prices for consumers, which are often referred to as the “supply” portion of the electricity bill. Therefore, by having the freedom to compare rates and deals, consumers have the power to choose their utility provider. But, an even more important perk of deregulated markets is that they tend to offer a broader range of renewable energy options. But, even deregulated markets come with their share of challenges, as California energy crisis in 2000 led to many states worrying that total deregulation may cause market manipulation and causing many to conclude that a combination of the two is best.
2. What To Consider When Choosing a New Utility Provider
Many people don’t put too much thought into choosing their energy provided, but they should because not all companies are the same. Everyone’s energy usage is different so it is imperative to find an energy provider that offers a plan that suits your needs best.
The plan
If you are now working from home all day long, free nights and weekends plan may not be the best fit as it would be better from someone who is not home throughout the week. Bundles are also worth checking in to as you can get more services from the same provider and in one monthly bill. To protect yourself from fluctuations in your monthly bills, look for fixed-rate plans. Besides looking at hidden fees such as enrollment, don’t forget to check the insurance and servicing part of the equation as many providers are happy to help when your boiler breaks.
Reputation
One indication that the company is a good energy provider is if it is a family-owned company that has been in business for multiple decades. If the supplier has been servicing the industry for multiple decades and passed on from generation to another, it knows what it’s doing. Ideally, you want to choose a provider that can handle a wide range of services, from natural gas and electricity to renewable energy solutions.
The carbon footprint
If you’re looking to be more eco-friendly, consider choosing a competitively priced renewable-energy plan. A lot of energy companies and even more tariffs are branded as ‘green’, but there’s no definition of what ‘green’ exactly means, so it’s worth checking before you sign up to make sure you’re getting what you expect.
Customer service
Newer energy providers claim to be digitally focused and take great pride in their online service, apps and user-friendly websites. These days, many companies are installing smart meters, allowing you to keep track of your energy data. But when something goes wrong, you want a responsive energy provider who will get back to you quickly and fix the issue as soon as possible.
Takeaway
The energy provider you choose can have a significant impact on the comfort and safety of your home, as well as your finances. Choosing your utility provider may not seem like the most important decision you will make regarding your property, but the services of that energy provider will enable you to perform your everyday activities, so at the very least, it is an important decision.