Today, energy users have the power to choose where their energy comes from, but that wasn’t always the case. Energy deregulation is the restructuring of the existing energy market and seeks to prevent energy monopolies by increasing competition. This growing movement allows energy users to choose from multiple energy providers based on rates that suit their needs and specialized product offerings.
How does energy deregulation work?
Energy deregulation works through reverse auction, where each company offers to sell its energy at the lowest possible rate. Independent agencies purchase the energy needed to suit the demand they predict, and then set the best rate for their customers.
Energy is thus delivered through the existing utility infrastructure. The utility companies that own the infrastructure are responsible for transmitting energy, but not for setting the rate energy users pay. This process allows energy users to receive the same service, but at a rate that fits their needs.