Electricity deregulation is a relatively new phenomenon, although the idea of unregulated electricity is far from new. As with any deregulation in industry, the objective is to remove power from monopolies, and encourage competition
History of Energy Deregulation
When electricity utilities were just getting started, there were often multiple providers directly competing in urban areas. Over the years the redundant systems in a city were purchased by one company and consolidated into a single electric utility that provided service for all residents.
At first it seemed like a good idea since it brought all the infrastructure together and made regulating electric utilities much easier. However, by the 1980s utility companies were habitually raising rates and customers were bearing the increasing cost as best they could. Talk of deregulating both gas and electricity utilities started shortly thereafter, but little progress was made into restructuring until the 1990s.
Both electricity and natural gas deregulation are now commonplace in the United States.
What States Have Residential Electricity and Natural Gas Deregulation?
Slightly over half of the states in the United States are currently involved in some sort of energy deregulation.
New to deregulation? See What is deregulation? for an overview. But energy deregulation means that you have a choice in your electricity and natural gas supply. You don’t have to buy your energy from the regulated utility in your area. This gives you options. You can choose a fixed rate plan, a renewable energy plan, a plan with free electricity at certain times, or even a pay-as-you go plan.
Some states have deregulated natural gas only, others electricity only and others have chosen to open both markets. A few such as Nevada and Florida are considering deregulation as a potential future move.
This is how the states currently break down on the issue of deregulation for residential customers:
Residential: Electricity Only
- New Hampshire
- Texas (In Texas you MUST choose a supplier. The local utility can not provide your electricity supply.)
Residential: Both Electricity and Natural Gas
- New Jersey
- New York
- Rhode Island
- Washington, DC
Residential: Natural Gas Only
- New Mexico
- South Dakota
- West Virginia
Even if a state is listed as having natural gas or electricity deregulation, you may not have it available to you. Often, this option is only available in specific areas served by investor-owned utilities or energy choice is limited to business customers only.
Is My Area Deregulated?
It’s easy to figure out if your local area is deregulated. You can use ElectricityPlans.com to look up the electricity plans available to your zip code in deregulated states served by this site. If none are listed, you’ll likely have to stick with your local utility, at least for now. This is because you may live in an area that is served by a local utility co-op or municipality. These type of utilities are exempt from deregulation even in a deregulated state.
In Ohio, for instance, you may live in an area that participates in government aggregation. This is where communities have formed buying groups on behalf of their citizens to purchase electricity or natural gas or both. If you live in an area that has government aggregation, you have the opportunity to opt-out if you think you can find a better electricity rate from another provider.
If you have an opportunity to choose your own electricity plan, you’ll want to grab your electricity bill and use it to compare electricity plans to see exactly how you’ll benefit. There’s a very good chance that shopping around for a new electricity plan can save you money.
ElectricityPlans.com is set up for customers like you who are trying to learn more about the process of switching to a new electricity provider and want a safe, free, transparent tool to help them determine the electricity plans that are ideal for their lifestyles, households, and businesses.
How Do I Shop for Electricity?
Once you have identified that you are in a deregulated area and can shop for electricity, there are a number of things to think about:
- How much electricity do I use?
- Should I go short term or long term for my electricity contract?
- Is there a deposit to start my electricity service?
- Are there renewable energy options to go green without installing solar?
- How do I compare the different electricity suppliers in my area?
If these are some of the questions you are asking yourself, we’ve got the answers for you.
It’s a 5 minute read and will answer The Basics: How to Shop for an Electricity Plan.
Then, start shopping!