Utility Deregulation Can Save You Money

For years, utility companies had a monopoly in a number of areas: electricity and gas, finance, transportation and communication. But in the past decade, federal and state governments have chosen to deregulate certain utilities and encourage free market competition. Why wouldn’t you want the freedom to choose which company provides your electricity, especially if the rates are cheaper than the one company that had control of the market for decades?

A co-worker recently mentioned that she was switching utility supply providers from PSE&G, which was the only electric and gas provider for households across northern New Jersey for ages.  These energy utilities have supply and delivery charges, at different rates, depending on how much electricity or gas units are used. By changing the supply provider, the per-unit charge will be reduced from ~.12 to ~.09. It doesn’t sound like a lot, but it will make a big difference in the winter, when the heat is on, and in the summers, when air conditioning use is in full force.

There are a number of alternative energy providers out there, and it may pay for you to check out their rates and compare them to your current utility provider. For us, if we switched our energy supplier, PSE&G would still provide the method of delivery through its power lines and natural gas piping; those costs will be included on your bill. But the delivery charges are generally lower than the supply charges.

Regulation History

The initial outlay for all of the communication, electric and gas lines crisscrossing America was a lot of money for the companies who decided to invest in these burgeoning markets. To protect the companies’ investments, the federal government regulated these industries, eliminating competition. While the intent was good, this led to the monopolization of these industries and a lack of choice for consumers, who were forced to accept whatever rates were charged.

This eventually led to companies having too much of a say within the government regulatory committees, and consumer interests fell by the wayside. Eventually, a deregulation movement started in the 1970s, affecting transportation and, to a lesser degree, energy companies. Over time, each state has made the decision whether to deregulate or leave the old regulation policies in place.

A number of states (including my state of New Jersey) have deregulated both natural gas and electric utilities; some just offer one or the other; and then there are the nearly two dozen that still heavily regulate the industries. Where does your state fall on these lists?

Both Natural Gas & Electric Deregulated

California (partial choice for gas)
Delaware (partial choice for gas)
New Jersey
New Mexico
New York
Rhode Island
Texas (partial choice for gas)
Washington, D.C.  

Only Electricity Deregulated

New Hampshire

Only Natural Gas Deregulated

Missouri (partial choice)
West Virginia
Wyoming (partial choice)

Neither Electric Nor Natural Gas Deregulated

North Carolina
North Dakota
South Carolina
South Dakota

Looking into alternative energy suppliers is something I’d like to look into when I have a spare moment, because hey, I like to be warm in the winter/cool in the summer, but I don’t want to continue to pay out the nose for it like many of us do. Mr. Saver and I do our best to conserve energy, but we have to have the heat or the air conditioning on to SOME degree in order to be fairly comfortable.

8 comments to Utility Deregulation Can Save You Money

  • Energy companies are now competing – which allows the customer to win. Ambit Energy provides ways a customer can have their kw’s costs refunded every month when the customer refers 15 other customers AND gives the new customer a free vacation upon switching. No contracts, no cancellation fees – the customers are now able to receive a kickback on their loyalty. Awesome! Go to the website and read up!!
    Now in NY, MD, TX, IL and coming to PA in the first quarter of 2011.

  • Good blog post Nicole. I honestly learned something new today. Its good that we have a freedom of choice for who we want to receive service from

  • Cathie

    Oops, I just went back and read again. I didn’t realize that PSE&G also supplied North Jersey. I thought that was JCP&L. Oh well.

    • Nicole

      @Cathie: Both PSE&G & JCP&L service North Jersey; which one you have depends on the town you live in. JCP&L mostly serves the northwestern portion of the state.

  • Cathie

    You must live in the same region of NJ as I do. We have PSE&G also. My husband was toying with the idea of selling energy before he was hired by someone else. No matter how much he explains how it works, it seems a little weird to me.

  • We live in Texas and I use Gexa to get our 9.6 cent per k/h rate. I love deregulation!

  • Hi Nicole

    Firstof all, I love the dramatic and beautiful picture,can you trade this stunning “electrified” sunset picture for four (4) of any of my really great picture?

    Now back to reality, excellent detailed and powerful information about utility deregulation. I would title this article ‘Pay Back Time” for all the suffering of high priced monopolized utility market.
    Unfortunately peoples do not realize they can switch for better price on they utility supplier,and will not cost them a red penny.

    I work as a Independent Utility Broker of Electricity and Natural Gas in several States of US.

    This option combined with energy star rated efficient appliances will save a big chunk of money on utility. If you really go to the extreme and claim your tax deductibles on qualified appliances,it depend on the state where you live what is available for your particular situation.
    So the ideal steps would be to start from the back and find out what is available in your state on energy efficient appliances then start shopping. If you own your house you can install instant hot water circulator and save hundreds of gallon water and you will have in your house instant hot water.
    By consulting with qualified plumber about the instant hot water pump option you have one more
    utility saving option.

    The real feel good savings are, on the switch of supplier painless,and free.

    Best regard
    Barnabee Bodi
    Independent Utility Broker of the following states:
    OH, MI, MA, MD, PA, KY, CA, CT, IL, IN, NY, NJ ,GA, FL,

    • Jan Radnoti

      Hi Barnabee,
      I live in NJ. I have Rockland Electric Company for my electrical service. How could you save me money? And, if my power fails, who would I call? Just how does it work? Thanks. Jan