What does energy deregulation mean?
Energy deregulation, restructuring or unbundling at a high level refers to the separation of an energy commodity itself – electricity or natural gas – from the physical delivery of that energy commodity to the final user. Deregulation has occurred in a number of jurisdictions across the U.S.; however, not all states have gone through this process and the history of those efforts spans the last 20+ years. Prior to deregulation, a utility provided electric or natural gas service as a fully-integrated company. The utility was responsible for providing all aspects of service to its customers including the energy – the physical commodity itself (electricity or natural gas) – and the delivery – the distribution and transmission system (the poles and wires or pipes) needed to bring the energy to the customer. Industry deregulation, whether it is the natural gas industry or the electric industry, can be thought of as the process by which the utility is reorganized so the energy supply (electricity or natural gas) and energy delivery (the pipes or poles and wires) are separated into two distinct functions.
Is energy deregulation good for businesses?
Simply put, yes. Deregulation is good for business because it gives business owners more control over their energy buying. Deregulation allows you to choose who you buy energy from regardless of the utility delivering your energy. Prior to deregulation, your energy supplier could only be your local electric or natural gas utility at the prices set by the state and federal government. As a result of the deregulation in certain electric and natural gas markets, you can choose a supplier of electricity and natural gas.based on your energy needs in terms of quality, flexibility and price.
