The goal of deregulated energy is to restructure the current energy market in an effort to prevent monopolies. Increased competition allows energy users to choose from a variety of energy providers based on the rates offered and the services that suit their needs. Because of the competition, rates are lower in areas where energy is deregulated but many people are not aware how it works.

In a area where energy has been deregulated, consumers have the right to purchase electricity service from a Retail Electricity Provider (REP). Most of the companies in the REP get their energy from the same source but package services differently in order to provide what consumers in their region need. Consumers are not required to use REPs, however. They may continue to obtain service from their state-appointed utility. If you live in an area where energy has been deregulated and have not switched to a new company, it is likely you continue to receive energy from the state-appointed utility.

If you live in a deregulated area, it is usually easy to switch to the deregulated companies. You simply visit their website or call them to learn what options are available. You will need to sign a contract which tells you the length of the plan you have chosen. Most companies offer contracts for 24 months with renewal available at the end of the contract. However, if you end the contract early or move outside the service area, you could be charged a fee for early termination. The bill may look different as it will be in two parts. One part will detail the costs of your electric supply and the other will detail the costs of electric delivery. You pay the total of the two costs and any good energy company will be happy to explain the bill for you.

Today, there are 17 states that offer energy deregulation although it may only be available in certain areas, not the entire state. These states include:

• Connecticut
• Delaware
• Illinois
• Maine
• Maryland
• Massachusetts
• Michigan
• Montana
• New Hampshire
• New Jersey
• New York
• Ohio
• Oregon
• Pennsylvania
• Rhode Island
• Texas
• Washington DC

The first state to attempt energy deregulation was California where it was initially not successful. Rather than lowering energy costs, suppliers raised prices to inflate profits, pushing utilities toward bankruptcy and causing major blackouts. When Pennsylvania decided to deregulate, however, they learned from California’s mistakes and the effort was a success. States who have followed Pennsylvania’s lead have also achieved success.

There is strong evidence that energy deregulation saves consumer’s money. It also gives consumers power over where their electricity comes from and most REPs offer 100 percent renewable energy plans for those who want to reduce their carbon footprint. Because of the competition, suppliers work to offer new and better products as well as lower prices to encourage consumers to switch from traditional companies.

If you live in a state where energy has not been deregulated, there are still ways you can save money on your electric bill. Installing new, energy-efficient windows are one way to reduce your energy costs, especially if you live in an older home. Switching to LED light bulbs can also lower your electric bills. If your appliances are ten or more years old, updating them with new, energy efficient models will also reduce your energy costs. Even if you do live in an area where energy has been deregulated, making these changes is a good way to reduce your carbon footprint and lower your energy costs even more.

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