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Deregulation 101

Never heard of energy deregulation before? Didn’t even know that the energy market can be regulated or deregulated? Don’t worry! Here is a simple explanation that will demystify deregulation.

In a regulated market, only one local company, normally referred to as the utility, can provide both the electricity or natural gas delivered to you and the infrastructure used to deliver energy such as poles and wires. In other words, the utility sets the price for electricity and natural gas supply, giving the consumers no choice when it comes to their energy provider.

However, in a deregulated market, the utility still owns the infrastructure and is still responsible for delivering energy to your home, but competing third-party energy supply companies (ESCOs) are allowed to buy and sell electricity or gas to you directly. The goal of deregulation is to lower the cost of energy for consumers by increasing the number of companies providing services and creating a more competitive energy supply market.

The great thing about deregulation is that it gives consumers the power to choose their supplier. If you switch to an ESCO like Columbia Utilities, there is no disruption of service, and you will continue to receive one invoice from the utility. However, if you have an emergency such as a power outage, you should call 911 and your utility.

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