Deregulation

When deregulation was being discussed several years ago, I did not know anyone who was in favor for it. When it finally came about, people were asking me if I or anyone I knew lobbied to the State to deregulate the power utilities. After what happened in California a few years ago, many people I have talked to question the wisdom of the States to deregulate the Utilities.

What compounds this problem is the sense by most people, who I have talked to, is the loss of representation of the State for them towards the Utilities. Many people feel, if the distributor (Utility) remains the same and we can choose either the Utility or someone else to supply our energy needs to our homes, why would we want 2 separate companies to deal with rather than one company (Utility)? How about if you were to have a problem with service, do not contact the supplier, you still contact the distributor (Utility). Why even have different suppliers?

Do not worry, it gets better, because I am not finished. In my State and a few other I personally know, spend millions of dollars towards promoting and educating people about "Energy Choice". On top of that, the State actually pays for audits to see how effective this promotion and educating is. Do not laugh because we are paying for it. This is a charge that is added to my utility bill. Did I say it gets better? Well, if you were to go to the web page where you could choose a supplier, guess whom you would see? It looks like an advertising campaign for the Utilities.

I am not the type to waste my energy on something that is apparent not worth spending it on. Maybe this is because I am an Energy Conservationist. So I asked myself if there was any cases where Deregulation was a success and if what occurred could be used everywhere? To my surprise it happened in a small town in California during the energy crisis a few years ago, where energy prices skyrocketed. This small town was unaffected by what was going on around them. The reason for this was a few years earlier the town voted on entering into a contract with a supplier of electricity and it was voted yes in the election. This was put on the ballot because of Deregulation. What I could gather, electric prices were reasonable and stable as a result of the contract. This certainly warranted more looking into. So I did some research and found a company that I feel is positive about deregulation and is there for the benefit of energy consumers.

Most people are not taking advantage of switching from their Utility electric and gas to independent suppliers for a variety of reasons. The first and foremost seems to be familarity, which produces uncertainty. This is because most people do not understand the circumstances that surround deregulation. But you will save if you switch and you will not notice any change except that you will pay less as a result of switching.

In most States for over ten years now Utilities have not been building power plants and many of their nuclear plants are in the process of being decommissioned. Yet the demand for gas and electric has increased. Besides the fact that most, if not all their present fossil fuel power plants are aging, the Utilities were forced into competing for energy in an open market. This led to a creation of a department inside the Utilities that were devoted to obtaining energy supplies for their customers. As more Utilities were affected by the failure to build power plants the more competitive it became in the market for energy supplies, the larger these departments became. It is getting to the point where the Utilities are not making any money off the purchase and resale of energy. The vast majority if not all their profits are coming from "DELIVERY or TRANSPORTATION charges." Unfortunately for the Utilities as the market becomes more competitive and demand increases by their customers the costs for acquiring energy increases.

As an energy conservationist, I have been frequently asked, why does the utility want me to save energy? The reason was because of the aformentioned and having their customers conserve energy curbed the effects of it. It is apparent that conservation is not enough and what occurred in California a few years back illustrates on how volatile the market can get under these circumstances. Most States today have a law very similar to the "Basic Service Generation" act. This is where the Utilities bid for energy in an auction. This will not stop the volatility of the market place as demand continues to increase.

States have mandated the Utilities to incorporate renewables in their systems such as solar, wind and biomass technologies. This is known as "RENEWABLE PORTFOLIO STANDARD" (RPS). In my State the Utilities must have 4% of their energy supplies come from renewables by the year 2004. If they do not accomplish this, they will be fined until they do. The RPS increases to about 10% by the year 2008.

What switching from your utilitiy to an independent supplier does for the utility is far more than what energy conservation does. It increases their profits and reduces the probability of being fined in the future. Whereas conservation reduces the consumption of energy switching does not and the utility makes their money from Delivery or Transportation charges.

Energy Service Companies Organization (ESCO's) may offer options your utility cannot. But the real advantage the ESCO's have over the utilities are overhead costs and not beng regulated. And this is passed on to you in the form of paying less for energy.

So what switching comes down to is that the service you have received from the utility remains the same because they make their money from Delivery charges and in fact will make more money if you switch. The ESCO's have to sell you the energy at a lower price because why would you switch if the price was the same or more. Furthermore the ESCO's are in a better position than the utilities to sell energy less because of the overhead costs the two are faced with.

There are a lot of ESCO's out there. Some charge to enroll and monthly fees. While others do not. Some even guarantee savings. My best advice is shop around and start saving.

If you are from New York, New Jersey or Maryland , send me an Email so I can give you the information. I am working on the other States and Countries.

Protect America's Forests. This is a link from the Sierra Club. I support them because they do work on behalf of everyone.