What Is Energy Deregulation? 6 Ways it Helps Small Business Owners

Initially, energy supply in the United States was done by a single source company that had the mandate to supply energy to all consumers around the country. The monopolistic company determined the rationing and the prices that consumers had to pay. This created a situation where one company decided the fate of thousands of other businesses. For example, the monopolistic entity could easily and without objections increase the cost of electricity, which affected most businesses as they were not prepared.

What Is Energy Deregulation?

However, after some few years of controlled energy, the rules changed, and energy deregulation came into place. Energy deregulation opened the market to other electricity supplying companies such that they could compete in an open market. Energy consumers were also given a chance to select the company that would supply them with electricity, which brought to an end the period of relying on a monopoly to supply energy. So, what are the benefits of energy deregulation?

1. Consumers Can Choose

Deregulation brought about a free energy market where there are hundreds of sellers and thousands of buyers. In an open market, consumers have the right to choose their products, and therefore, they have the right to choose their energy supplier. The choice depends on the energy preferences, and the number of money consumers is willing to pay. Most of the consumers can choose the company that offers them the best deal rather than being subjected to an energy supplier who has all the powers.

2. Level Playing Field

By deregulating energy supply in the country, energy professionals brought a level playing field where energy supplying companies had a chance to impose their services in the market. Giving energy supplying companies a level playing field means that no company has an undue advantage. There is no energy supplier with monopolistic benefits of controlling the market by deciding the prices and rationing. Deregulation was not only beneficial to consumers but also to energy supplying companies as well.

3. Quality Services to the Consumers

In a situation where a company is not confronted by other competing companies in the same industry, there is no incentive to provide quality services to the customers. That is what existed before energy deregulation. However, after the incorporation of the new energy management policy, energy solutions become more efficient and quality. Companies had to compete by offering quality services to their customers so that they could maintain them and attract other customers.

4. The Decrease in Cost of Energy

A monopolistic company controls the industry and determines prices, quantities, and the mode of delivery. Before energy deregulation, one company charged exorbitant fees but delivered poor quality services. However, after energy deregulation brought the prices down. Each company wants to attract customers through competition, which brought the prices of energy down. This is easily depicted by the fact that a new refrigerator uses less energy, 75% less than what it consumed in the 1970s.

5. Choose Green Energy

There are hundreds of renewable energy procurement solutions available for customers to select. This is not the era where consumers were forced to take any energy that was supplied by the monopoly. Currently, most of the homeowners are cautious about the type of energy they are picking from the industry. Renewable and solar energy has become a sensation in many families in the United States. People want to play their part in making the world sustainable and attractive to future generations.

6. No Interruptions

Before energy deregulation, energy supply management was done by one company that determined how consumers were going to get energy. There was a lot of interruptions, as thousands of consumers were interrupted regularly. One could not determine when to get energy, but the monopoly had the power to determine when to cut the power supply to a particular business. This resulted in huge losses and inconveniences. However, with the current regulations, there are no interruptions. Energy suppliers will lose a considerable number of customers if they have interruptions.

Opening the energy market through deregulation has proved to be advantageous to customers in several ways. However, energy supply companies have also benefited from the new policy. Most of the companies have to be competitive if they want to have a share in the energy market.