10 Reasons More States Should Deregulate Electricity
It’s been a number of years since the telephone industry was deregulated. The thought of having only one choice in telephone service providers sounds ridiculous to today’s generation. In most areas of life in the United States, we have options to choose from. Fair competition in the marketplace is one of the cornerstones that our country was built upon. In spite of that, consumers and businesses, in most places, don’t have a choice when it comes to their electric power provider.
Most people are also under the mistaken assumption, that the power company which sends them a bill each month, is the same company which has generated the electricity they are consuming. This perception comes from a lack of understanding of how our power system works.
Power plants produce the electricity that feeds into the massive interconnected delivery system that is now referred to as the power grid. It is that power grid that then delivers the electricity to your local area and eventually to your home or business.
Your local power provider is responsible for servicing the lines and is your connecting point for payment and issues related to that electrical service, regardless of where that energy originated from.
Deregulation would not change who serviced your local power lines, or who your local power company was. The option it would give consumers, is the ability to choose the which power source receives the payment for the electricity billed through your local service.
Listed below are ten reasons why more states should consider deregulating electricity.
- Consumer price options Flat or variable. One of the possibilities available with deregulation is giving the consumer the option of paying a flat or variable rate for their energy usage. Many propane dealers have given this option to their customers in the past. The propane customer would have the option of a contract that was set at a fixed rate per gallon for the year with no fluctuation, or they could have a standard contract where the price per gallon fluctuated with the market.
- Green source support. With the ability to choose your power source, the consumer that desires to support green energy options can do so through their choice of a power source that utilizes wind and solar energy.
- Free market competition. Deregulation allows and encourages competition between existing and new energy providers. This competition would hopefully keep prices lower they are under the current regulated system.
- Business opportunities. With deregulation comes many new business opportunities, just as it did with the deregulation of telephone service. Smaller companies will be eager to take on the giants.
- Same service, different price. The service would still be provided in the same way by the same people. Your billing would still come through the same company, only your prices would be susceptible to change.
- Education of the public. A natural bi-product of deregulation is the education of the public regarding how their electric power is produced and delivered. Knowledge is power, they say, and this remains true in this situation.
- Renewable energy development. Deregulation also has the potential of encouraging more research and development of renewable energy sources, by giving consumers more convenient options for accesses these alternative sources.
- Improved efficiency. Competition fuels the need to improve a provider’s efficiency in order to remain profitable in the current market.
- Economic stimulus. When utility costs are lowered, its benefits are far reaching. Not only does it put more money in the pockets of consumers, it also lowers the costs of doing business, which can lower prices.
- Deregulation stability. Several states have already gone through the deregulation process with varying results. As each state implements these changes, new ideas are brought into play, which can benefit the rest of us.
Energy consumption and costs are an important topic in today’s world. Improvement only comes with change. Riding through the ups and downs of those changes are going to be part of the deregulation process.
