6 Frequently Asked Questions About Energy Deregulation


Many states are implementing deregulated energy markets to provide customers excellent financial and environmental benefits. As energy deregulation becomes more accessible, it’s important to understand the basic concept and process of energy choice.

Here are 6 frequently asked questions about energy deregulation:

  • What Is Energy Deregulation?

Energy deregulation restructures the current energy market by encouraging competition to prevent monopolies. Competitors purchase energy from producers and sell energy to customers. Customers choose from multiple energy providers based on prices, payment plans, and products to control energy expenses. 

Energy regulation references the traditional energy market structure. Regulated energy markets are monopolized by utility companies. Energy prices and processes are completely controlled by one governing body, meaning only local utility companies are able to sell energy to customers, effectively eliminating a customer’s power to choose.

Energy deregulation advanced during 1992 when the National Energy Policy Act was passed, which allowed competitors to enter the energy market. Gradually, energy deregulation grew, leading to the creation of a retail market for energy.

Understand the basic concept and history of energy deregulation.

  • How Does Energy Deregulation Work?

Energy deregulation requires energy providers and utility companies to supply energy to customers. Energy providers purchase energy from producers based on a predicted demand and create competitive prices for customers. Utility companies deliver energy to customers using existing infrastructure and distribution systems. Utility companies also manage energy maintenance, including reading meters and handling emergencies, such as power outages. 

Providers determine rates and utility companies deliver energy, allowing you to receive the same reliable service at more affordable rates. 

  • What States Offer Energy Deregulation? 

Energy deregulation continues to increase across the United States. Currently, 26 states offer some form of deregulation regarding electricity, natural gas, or both. No state offers complete deregulation, but Texas provides the closest opportunity with about 85% of the state able to choose energy providers. 

States without any form of energy deregulation include Alabama, Alaska, Arizona, Arkansas, Colorado, Hawaii, Idaho, Iowa, Louisiana, Minnesota, Mississippi, Missouri, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, and Wisconsin.

Research states featuring deregulated energy to learn the type of energy choice available for you. 

  • How Does Energy Deregulation Save Money? 

Energy deregulation saves customers money, reducing energy expenses by about 20% every year. Reasons energy deregulation saves money include:

  • Multiple Rates: Every energy provider offers a different rate, meaning customers choose affordable options perfect for their budget. 
  • Custom Payment Plans: Energy providers usually create fixed- or variable-rate contracts. Fixed contracts secure rates over extended periods of time, typically lasting between 6 and 18 months, whereas variable rates fluctuate during high demand to raise or lower prices.
  • Competitive Markets: Energy providers compete to earn a customer’s business, guaranteeing lower prices. 

Recognize the money-saving benefits of deregulated energy markets. 

  • How Does Energy Deregulation Improve the Environment? 

Energy deregulation improves the environment by offering green energy options. Traditional forms of electricity, specifically fossil fuels, emit carbon dioxide and other harmful gases during production, increasing pollution and leading to global warming. Green energy provides a sustainable and clean alternative for improving air quality and combating global warming to guarantee a better future. 

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Energy deregulation grants access to multiple suppliers selling green energy. Each provider lists a percentage of green energy distributed by their business, so environmentally-conscious customers can affordably receive green energy and reduce their home’s carbon footprint.

Energy deregulation fights global warming on a larger scale by promoting green energy providers. 

  • How Do I Change Energy Providers? 

Change energy providers to access the amazing advantages of energy deregulation. Calculate your current energy rate by reviewing previous bills to guarantee you select a better deal. Compare rates, payment plans, and products of Texas electric providers to find an ideal option for your home and budget. Generally, choose a cheaper fixed-rate contract to guarantee consistent savings. 

Once you’ve selected an energy provider, contact your new provider to create a contract outlining your deal. Remember to contact your old provider, either you or your new provider, to inform them of the switch. Receive your new bill to officially change energy providers.

Change energy providers to reduce energy expenses and improve the environment.

Answer the 6 frequently asked questions about energy deregulation to recognize the advantages of energy choice. 

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