Energy Deregulation is a Positive for Consumers, but Do Your Homework
Danny Small is Manager, Building Science Development for CertainTeed Corporation
If your utility called you up and offered you a significant discount on your electric or natural gas rate, would you take it?
Usually I’m speaking to builders, architects and homeowners about reducing energy costs by using less energy. Now, in many parts of the country, you can also reduce your energy costs by simply paying less for the energy you use.
With the recent deregulation of the energy industry, individuals as well as businesses in certain areas of the U.S. now actually have a choice of utility suppliers. What that means is that you can now lower the rate you pay for your energy by taking advantage of a seamless and easy process. Electricity choice is well under way, and natural gas is right behind it. If your state does not yet offer energy choice, it’s coming, and it can offer a significant savings for residences, small businesses and large commercial and industrial entities.
Here’s how it works: Your utility bill consists of three components: generation, transmission and distribution. The utility remains responsible for distribution: Getting the energy to your house, maintaining the lines and poles and taking care of the billing, collections and customer service. The generation and transmission however, is now open to competition and can be “shopped around,” resulting in potentially large savings for the customer.
You may be wondering how the utility feels about this whole thing. In one of my previous positions, I helped manage energy efficiency incentive programs in several eastern states, working closely with utility companies as deregulation started to roll out. The utilities actually actively encouraged their customers to shop their rates. Since the utility does not make its money on generation or transmission, they are not looking to provide the lowest rate; they just pass the cost on to the customers. You can view a news interview with a representative from a Pennsylvania utility, explaining how the process works.
Switching is easy. It costs nothing, takes only a few minutes online or over the phone, and in many cases there is no long-term commitment. Everything stays exactly the same from the customer’s perspective: Same bill, same payment process, same service, same electricity. Just a lower rate! You really have nothing to lose in making the switch.
Among energy suppliers, both rates and terms can vary widely. Go to www.ShopForEnergy.com to see the options available in your area. Besides a competitive rate, look for a plan with no termination fee. In addition, some suppliers offer 100% renewable energy options (recommended) and other benefits to win your business. For example, one major eastern supplier, North American Power, offers all of the above and also contributes $1 per month from its own profits on behalf of each of its customers to a charity of the customer’s choice.
So far, my experience “privatizing” my energy has been extremely positive, and I highly recommend it if the option is available to you.