History of Energy Deregulation

Published: November 6, 2017

Diversegy, an energy advisory, exists to help businesses reduce costs, mitigate risk and improve their bottom line through incorporating an energy strategy into their business. Energy deregulation opens the market for competition, driving down prices, creating new product structures, and allowing the customer to have more control over their energy bill. Diversegy is here to help customer navigate those choices. So, what is energy deregulation? Why is it so important? How did it come to be?

 

Energy choice is the de-monopolizing of the utility and energy spends. Prior to energy choice, the regulation of the industry meant that the governing body regulated the price you paid for the energy supplied. Deregulation has been on the minds of energy experts and those in the industry since the Great Depression but it wasn’t until after the price shocks of the oil embargoes of the mid 1970s (utilities were not prepared) that they began to realize something had to change. Deregulation opened the market to allow individual companies to purchase and sell energy supply to consumers, inviting price competition and product innovation into the market place. While the utility still owns and maintains the lines and meters into your business, you do have a choice in who provides the actual energy you consume.

 

This is similar to deregulation in the telecom industry in the mid-80s. Prior to that, only a few telecom companies existed because they monopolized the telecom industry.

 

In addition to creating competition in price, energy deregulation drives suppliers to create different product structures, often driven by consumer’s requests. You now have the choice of green energy supply, a short or long term fixed rate, an index price and more. Before the deregulation of energy, consumers blindly went with the utility in their area and whatever price they determined was ‘fair’. But what the utility considers ‘fair’ isn’t always what works best for you. We care about your energy rates and not what works for the utility or even us.

 

California was the first state to open its retail energy market but failed due to a result of stakeholder compromises. It caused a high-profile energy crisis on the west coast in 2000 and 2001.

 

Today, energy deregulation is thriving. However, it can be challenging to the consumer to navigate all of the different suppliers in their area. For commercial, industrial, and municipality customers, Diversegy is here to help shop the market and find the best rate, product, and supplier to work with that makes the best sense for your business. Having the choice allows you to have more control over your energy expenses. It also gives you peace of mind knowing where your energy comes from.

 

For more information, email info@diversegy.com.

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