In a regulated electricity market, the consumer has no choice. They can only purchase from one source, the local utility. In a regulated market there is no incentive to offer cost saving solutions or innovative products and services. That's now changing because people in many states have the right to choose who they buy their electricity supply from.
Deregulation opens the generation portion of your bill to competition. This essentially turns the generated power into a market-based commodity, with the price dictated by supply and demand. Competitive markets lead to innovation and lower costs for customers.
In a deregulated market, the local utility is reduced into an electricity delivery company. This makes it possible for customers to choose an alternate source for the generation portion of their bill which is approximately two thirds of their total cost. All customers continue to rely on their local utility to deliver their electricity, provide service and reliability, read their meter and in most cases, bill the customer. This portion of the electricity service remains the same.
Retail competition, in the electricity markets, is superior to regulated service as it delivers customer-focused service, enables innovative product development and leads to the most efficient market price.
All consumers should be afforded the opportunity to participate in competitive retail energy markets and enjoy the benefits that only competitive retail markets can deliver.
Currently there are 20 states in various states of deregulation of their energy markets. It takes time for a state to achieve true deregulation where the rates are at market rate pricing. Electrical deregulation is a growing opportunity for consumers to save as it expands across the nation.