PrintThe Current State of the Marketplace
The deregulation of the power sector and introduction of renewable energy policies has proven to be positive from all four attributes’ perspectives- accessibility (includes affordability), reliability, security, and sustainability. The end consumer, whether your home or place of work, now can choose where they buy their electricity, but are still assured reliable delivery. It is, in essence, the “best of both worlds”.
Currently, 29 of the 50 states have some degree of deregulation in their markets. Note that because natural gas is so integral to energy consumption in the home and in industry, it is also regulated with deregulated parts. In other words, in some states, you also have a choice in who sources your natural gas, even if it is not the same as the distribution. Unlike with electricity markets where you may decide to choose a supplier based on how they generate the electricity, with natural gas, it is more about price competition.
Let us use an example not too distant from the PSU campus in southeastern Pennsylvania near Lancaster. The electric utility is PPL. This is the only utility that services the area, so they own and are responsible for the transmission and distribution of electricity, whether residents buy it from them (PPL also generates power via a sister generation company), or from another producer of their choice. Pennsylvania has several utilities that cover various parts of the state so someone living in Pittsburgh does not use PPL infrastructure; they have their own utility. Until the state deregulated in 1996, that meant buting electricity from PPL. But today, residents in this part of the state have no less than 20 options for buying electricity. In Pennsylvania there were advantages and disadvantages of deregulation. One positive change was that the utilities were required to allocate part of their income towards energy efficiency and renewable energy awareness and programs. Another major advantage was the ability to shop around for good rates. But that also introduced some disadvantages. First of all, the price caps that were in place in the regulated market (to avoid a single monopoly provider from high prices) were eliminated and many saw big changes in their pricing. Another disadvantage was that now the consumer was faced with a large number of choices and complex payment plans. It was suddenly possible to accidentally put yourself in a situation where you actually paid more than you used to, even in the more competitive market.
Fortunately, in Pennsylvania, a new state authority, PA Power Switch, was established to provide a wealth of information and guidance to residents and businesses in navigating the deregulated market. Feel free to visit the Power Switch website.