Energy Education 101

How Deregulation Works

Now that we have an option to switch electricity and gas suppliers, it helps to understand how this all works. Up until deregulation came along, the utilities had always generated the power at the power plants and handled transmission and delivery of the electricity or gas to your home or office. The energy industry continues to work the same way now under deregulation, it is simply that there are many new competitive suppliers who are generating their own energy supply from the power plants (which the utilities no longer own) and then using the utilities infrastructure, they are able to deliver the power or gas supply to customers.

The Way It’s all Connected:

The generation and delivery of electricity and natural gas continues to happen the same way as it always has under deregulation. The main difference deregulation has provided is that the utilities no longer own the generation plants and are now primarily in the delivery and maintenance business. This allows new suppliers to have their own individual contracts with the power plants and gas generators to supply competitively priced energy to their customers versus the utilities.

DIAGRAM – have image of power plants, power lines delivering to homes/offices

The utilities continue to provide transmission, delivery and maintenance services as they always have. In addition, they continue to handle all billing for customer accounts. All competitive suppliers work with the utilities to communicate any switching of a customer from one supplier to another.

What it means to Switch Suppliers

When you switch suppliers, you are simply allowing a different energy supplier other than the utility to generate or supply your electricity or gas. Your current utility will continue to be the utility that actually delivers the electricity or gas to your home or office and is the company you call for maintenance or billing purposes. Your new electricity or gas supplier will only be generating the energy. The utility handles the rest.