The electric power industry is transitioning from highly regulated, monopolistic utilities which provided their customers with a total package of electric services’ towards competitive markets in which each phase of the electrical service is separate: generation, transmission, and retail sales. Generation, also called wholesale electricity, and retail electricity are now deregulated in many states. States now own and regulate the transmission wires and lease them to retail electricity providers. In deregulated states, wholesale generators provide the generation services, while retail electricity providers design new ways of packaging, pricing and marketing the electricity to reduce costs for customers.
Since 1978, the electricity industry has deregulated by sector, starting with wholesale markets and then retail markets. Today, many States have passed major legislation and/or regulations to restructure their electric power industry and eighteen have opened competitive retail markets.
- 1978-Congress passed the Public Utility Regulatory Policies Act which opened wholesale power markets to non-utility producers of electricity.
- 1992-Congress opened up interstate electric grids for wholesale trading.
- 1996-FERC issued Orders 888 & 889 which allowed states to open retail sector to Competition.
- 1998-Electricity deregulation goes into effect. Retail energy companies entered to provide service to Customers. NY opened to retail competition.
- 2000-MD opened to retail competition.
- 2002-TX opened to retail competition.
- 2003-NJ opened to retail competition
- 2011-PA rate caps lifted fostering competition
Benefits to consumers:
For electricity consumers, especially in the commercial and industrial sector, competitive energy markets have opened new and innovative ways to save money and manage their energy requirements. Consumer choice allows business owners and decision makers to search for lower rates from competing ESCO’s (energy service companies), hedge against price increases, manage risk, calculate budget, and customize the factors that affect their business most. While different business drivers influence how companies and establishments buy energy, the end result is the same; the opportunity to control and manage energy costs and services, and tailor the supply and pricing contracts according to the facility’s operating requirements.
Securing reliable power at the best available rates begins and ends with information. With Integrity energy services, our intimate familiarity with all aspects of the procurement procedure is an invaluable component of a successful procurement. Whether a business is new to deregulated energy opportunities, or seasoned veterans, we productively employ our resources to always improve their bottom line.