Energy Regulation vs. Energy Deregulation: Money-Saving Benefits of Energy Choice

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Energy Deregulation

Accessing energy is essential for powering homes and businesses, but prices continue to skyrocket, leaving families with broken budgets. An energy market’s structure, specifically regulated or deregulated, impacts a customer’s ability to choose affordable rates and control energy expenses. Understand the difference between energy regulation and energy deregulation to recognize the money-saving benefits of energy choice. 

What is Energy Regulation? 

Energy regulation presents energy markets monopolized by utility companies. Energy prices and processes are controlled by one governing body, meaning only local utility companies are able to sell and distribute energy to customers. 

Energy markets historically prioritized energy regulation; however, changes have occurred to alter the current landscape and deregulate certain states. 

Process of Energy Regulation 

Energy regulation only involves utility companies. 

Energy prices are determined by public utility commissions or equivalent government agencies, and customers receive only one price and option for energy. Utilities deliver energy to customers using infrastructure solely owned and operated by their company and perform necessary maintenance. 

What is Energy Deregulation? 

Energy deregulation restructures the current energy market by encouraging competition to prevent monopolies. Deregulated energy markets allow competitors to purchase energy from producers and sell energy to customers. Every competitor creates a customized energy package, meaning customers choose from multiple energy providers based on rates, terms, and products. 

Energy deregulation began growing during 1992 when the National Energy Policy Act was created. The act created a plan for a competitive wholesale energy market, meaning competitors could enter the energy market. Deregulation gradually grew across the United States as laws further simplified market participation.  

Currently, 16 states feature deregulated energy markets, and other states possess partial deregulation regarding either natural gas or electricity. No state offers complete deregulation, but Texas provides the closest opportunity with about 85% of the state able to choose energy providers. 

Process of Energy Deregulation

Energy deregulation involves energy providers and utility companies. 

Energy providers purchase energy from producers based on a predicted demand and determine rates suitable for their customers. Utility companies deliver energy to customers using existing infrastructure and distribution systems. Utilities also manage energy maintenance, including reading meters and solving emergencies, such as power outages. 

Providers determine rates and utilities distribute energy, meaning customers receive the same reliable service, but at affordable rates better for their budget. 

Changing Energy Providers 

Change energy providers to access the amazing benefits of energy deregulation. Choosing an energy provider requires comparing rates, payment plans, and products. 

Compare rates by determining your current energy rate. Review previous energy bills and statements to calculate your average rate. Research multiple providers to compare rates and find a better deal. 

Choose an excellent payment plan by recognizing the two primary types: fixed and variable. Fixed rates involve contracts for securing an energy rate over an extended period of time, usually between 6 and 18 months. Variable rates fluctuate based on market demand to either raise or lower prices. Generally, fixed-rate contracts are better options for avoiding market fluctuations and achieving budget certainty. 

Find energy providers selling perfect products for your home, specifically regarding green energy. Green energy provides an environmentally-friendly alternative to traditional forms of electricity, primarily fossil fuels, by avoiding releasing harmful pollutants and combating global warming. Energy providers display a percentage of green energy sold by their business to grant environmentally-conscious customers affordable access to green energy. 

Locate the perfect energy provider for you and your home by comparing multiple energy and light companies in TX.

Benefits of Energy Deregulation

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Energy deregulation offers numerous benefits for customers, including:

  • Monthly Savings: Energy providers feature lower rates allowing you to save money on energy bills, equalling about 20% every year. 
  • Better Budgeting: Energy providers offer fixed-rate contracts for securing your payment plan and avoiding price fluctuations during high demand. 
  • Enhanced Customer Service: Competitors are required to attract, earn, and retain customers, meaning guaranteed lower prices and better customer service for customers. 
  • Energy Awareness: Increasing awareness of your home’s energy assists in developing energy-efficient habits for saving money and the environment. 
  • Environmentally-Friendly Options: Energy providers offer affordable green energy to fight global warming on a larger scale.  

Earn the money-saving benefits of energy choice by recognizing the difference between energy regulation and energy deregulation.

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