Benefits of Energy Deregulation
March 10, 2010 by Ambit Energy
What Are The Benefits of Energy Deregulation?
1. Energy deregulation creates a level playing field for future industry rivalry and competition by ensuring that all companies have an equal chance to provide service to electricity consumers. Basically deregulation means that the consumer, not the provider, will now call the shots in the electricity market.
2. Energy deregulation lowers prices for residential consumers by empowering them to choose their electricity supplier. What if your only soda option was Pepsi? If Pepsi is your thing then you’d be happy, but if you’re a fan of Coke or Dr. Pepper, you wouldn’t be happy with Pepsi as your only option would you?
3. Energy deregulation equalizes unjustifiable regional differences in electricity prices. While the average price of electricity in the U.S. is about 7 cents per kilowatt-hour (kWh), it varies widely from state-to-state. This range is from about 5 cents to 10 cents per kWh. Deregulatory initiatives that are underway in many states foreshadow the benefits under nationwide deregulation.
4. Energy deregulation increases jobs and benefits local communities. Unfortunately many large utility companies that have a monopoly in their market do not want consumers to have the ability to choose alternative providers. These companies have used scare tactics, intense lobbying and outright deception to convince many local communities that deregulation will hurt them.
5. Energy deregulation benefits the environment by empowering electricity consumers to be smarter, more demanding shoppers. This means that power companies will be held to higher standards of efficiency and cleanliness. This will ensure that your community is provided with the power they want without increased pollution.
6. Energy deregulation increases service reliability. Under the regulated monopoly model, consumers cannot change to a new provider when their current provider proves unreliable. Under competitive conditions, failure in service will be met with consumer rebellion and subsequently loss of profit, which then strengthens the incentive to maintain higher standards of service. Just as deregulation and competition in other industries have resulted in improved safety and reliability, energy markets will benefit when liberalization occurs.