Deregulation History

Until the 1990’s, control of the energy industry rested with a large group of regional energy (utilities) monopolies….there was no option to compare electric and natural gas supply prices.

The goals of deregulation were to lower energy prices, improve service and encourage innovation in the utilities industry.

Congress laid the foundation for energy deregulation when it passed the… Energy Policy Act of 1992.

This act created a new class of exempt wholesale generators to sell power in competitive wholesale markets.

In 1994 twenty two states deregulated their electricity markets including New York, Pennsylvania, Connecticut, Massachusetts, New Hampshire, Rhode Island, New Jersey, Maine, Delaware, Maryland, Ohio, Illinois, Texas, California to name a few.

Results

As deregulation took effect, competitive retail electric and natural gas suppliers emerged to offer business customers’ competitive pricing and alternative product options, such as…blended rates, fixed rates, and variable rates, from the standard utility default variable rate.

Energy deregulation has presented businesses with the opportunity to control energy costs by choosing a competitive electric and natural gas energy supplier instead of staying with the local utility.

What has changed?

Utilities are still responsible for delivery of your electric and natural gas.

Power plants are owned by independent entities, in New York it is NYISO (New York Independent System Operator), which generate the power (electricity) that flows to the grid.

All third party electric and natural gas suppliers are called… ESCO’s (Energy Service Companies).

Utilities and ESCO's are collectively known as…Load Serving Entities (LSE).

Market participants, such as local utilities, retail electric suppliers (ESCO’s) and other registered market participants, purchase contracts for electricity that are available on the grid and “sell” that electricity to end users.

Energy is purchased on the NYISO (New York Independent System Operator) at…. "Day Ahead" or "Real Time" prices.

For more information on this topic… Contact: ↓