In 1998 state legislatures and the public utility commissions (PUC) of many states opened competition for electricity and natural gas supply. In the past, one utility provided all parts of your energy service: generation, transmission, and distribution.
With competition, generation is separated from transmission and distribution. This allows consumers to choose their energy supplier, while the delivery of the energy is still regulated and is the responsibility of the local utility company.
Generation: With deregulation you’re able to go direct and choose the company that produces energy or the company who buys it on your behalf to sell to you.
Transmission and Distribution: This is the actual delivery of electricity across poles and wires and natural gas through pipelines to your business or home, by your local utility company. Your utility company is responsible for maintaining the poles and wires, or pipelines, and responding to emergencies and power outages. The public utility regulates transmission and distribution to ensure the safety and reliability of your services.
The Benefits of Energy Deregulation
As a consumer in a deregulated energy market, you enjoy the following benefits::
- Multiple options for selecting an electricity and natural gas provider
- Flexibility in developing an energy strategy that’s right for you
- Freedom to choose from a variety of products, prices, and terms
- Protection from rising costs
- Budget certainty
- Transmission and distribution are regulated by the PUC and guaranteed
