The Difference Between Regulated & Deregulated Energy Markets
Much is often said of the deregulated and regulated energy markets, whether the discussion comes from the residents of a state, politicians, journalists, or consumer advocates. However, many still find it difficult to differentiate between the two; it’s a challenging difference to understand, but this post will explain the confusing parts.
In regulated electricity markets, there is a single company referred often as the utility company. The utility company claims to be the owner of the entire electricity infrastructure and has different responsibilities, such as purchasing energy from companies that make it, as well as selling and distributing it to the end consumer.
When it comes to deregulated electricity markets, additional parties are involved. The infrastructure is still owned by the utility company, but the responsibility of the company now is to only distribute energy. Deregulated markets permit energy provides to compete for selling energy directly to the end consumer; this is the type of energy regulation that keeps energy rates low for the consumer.
Since deregulation came into existence, consumers have been given the option to choose where to buy their energy, just like they have the option to select their long-distance phone service provider. This enabled for completion between electricity retailers and fostered the creation of multiple REPs.
So why a deregulated energy market could be better than a regulated one? The consumer has experienced immediate benefits of altered energy consumption and buying habits. Results also include increased protection through emergence of competitive companies and elimination of monopolies. Startup of REPs also has contributed to job creation in different states.
With deregulation, one thing is certain; stakeholders will continue arguing the merits of deregulation in the future. Less control in the hands of the government can be viewed as a positive stride towards growth and innovation and a step away from high prices.
Shopping for energy
Before you shop, you need to consider several factors. Price is only one of the factors; when acquiring services of a new supplier, it is imperative for consumers to conduct a thorough research on the load management, reliability, and any extra charges a supplier may have. In case where homeowners don’t want to take up the challenge, energy consultants provide low-cost to free services that involve conducting a blind auction that encourages suppliers to offer the best market rate right in the start.
Many energy providers have details of all companies offering energy plans to businesses and residents across Alberta, Ontario, and other provinces. They know that generation companies produce electricity or harvest natural gas, while competitive providers sell that energy to consumers with utilities delivering the supply to offices and homes. If you live in a deregulated surrounding, you have the option to shop for energy rates for competitive prices. Comparing several options will help consumers get the right rate structure, and other features that fit their needs best.
Shopping for a new energy supplier is your right as a resident in Canada. Across many provinces, like Alberta, Ontario, etc. both business owners and residence have options as to where they buy their natural gas and electricity supplies. Whether they opt to continue on with their utility company’s regulated rate or device to go with a marketer operating in their area, they have the ultimate choice.