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Energy Deregulation = Choice

Written by: Teena

Article Overview: People in many parts of North America now have a choice of energy providers. In the mid 80’s the federal government decided that monopolies were not good for the country and a competitive marketplace in the energy industry would be better. It had been proven that when a regulated monopoly was deregulated, consumers benefited. New and innovative products were developed, services improved and prices went down.

Energy Deregulation = Choice

With the deregulation of the energy industry, utilities still deliver natural gas to homes and businesses but energy providers buy the gas from the wells or on the commodities market, and transport it to the utility. It is then delivered to homes and businesses by the utility the same way it always is. Energy providers compete against each other, offering different services and prices. Consumers can choose the energy provider they want to use.

Customers use the same local company for transportation, delivery and emergency needs, but choose their energy supplier. Utilities do not make a profit from the gas or electric commodity portion of the bill. Their profit is from service and delivery, including distribution and admin charges.
Most utilities support “choice participants” so they can concentrate on their core businesses.
Customers have the option to be protected from price volatility with options like a Fixed Price Program.

Under state regulation, a local utility carrier is responsible for maintaining pipes, wires and meters that transport and monitor energy consumption. In case of emergency, customers till call the local utility carrier. Customers are not required to switch. They can stay with the utility and opt for variable rates that are market driven. Nothing changes for the customer except the option to protect themselves from fluctuating rates. Customers continue to receive their energy bills just as they always have. Utilities continue to do billing, read meters and maintain and repair the pipelines just as they always have. Gas is piped through existing lines, so there is no installation fee.

# Since 1999 natural gas prices in the US have tripled.
# Electricity has doubled over the last 6 years.

Prices are always Changing
In today’s volatile market, energy prices fluctuate constantly.
The weather during any particular season can affect the cyclical demand for natural gas and electricity. The colder the weather during the winter, the more pronounced the winter peak wil be for natural gas customers. An extremely warm winter can result in even greater cooling demands, which in turn can result in increased summer demand for natural gas.
Electricity tends to be the opposite of the Natural Gas fluctuations. Demand is greatest in the summer due to cooling and air conditioning needs. Electricity can also be affected by weather causing outages and damage to lines and equipment from storms.

Pricing Options
Most of us are familiar with adjustable rate mortgage as compared to a fixed rate mortgage. The adjustable rate fluctuates with the economy. Most people want to lock in a fixed rate - for peace of mind. The same applies with energy.

Price Protection: Lock in a Rate
Price protection insulates the customer against the volatility of the energy market.
Customers can lock in a rate for up to 3 years depending on local availability.
# Enables the customer to manage their budget.
# Offers longterm price protection
# When energy rates increase, the customer’s rate does not!
# Bill amounts still fluctuate based on usage but cost per unit stays the same.
# No cancellation fees.
# Customers can switch to a fixed plan at any time for free.

Remove the uncertainty
With a fixed rate plan, you can control your household budget. Get peace of mind.

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Article Tags: carrier customers, commodities market, core businesses, deregulation, different services, energy bills, energy consumption, energy industry, energy prices, energy provider, energy providers, energy supplier, local company, market energy, natural gas prices, pipelines, price volatility, transportation delivery, variable rates, volatile market



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