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.
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)
Texas (partial choice for gas)
Only Electricity Deregulated
Only Natural Gas Deregulated
Missouri (partial choice)
Wyoming (partial choice)
Neither Electric Nor Natural Gas Deregulated
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.