Not understanding the process of deregulation and being able to shop around for electric supply is perhaps the biggest reason that not all customers in deregulated areas are participating in electric choice. Some may worry that they’ll end up paying more, while others are confused about what will change. Many simply don’t think they have the time to shop around and switch.
So, what will change? The short answer is that you’ll see a different electricity supply rate on your monthly bill. There’s nothing new to install, and in most cases, you won’t even get a separate bill. To answer a little more thoroughly, see below for details about the deregulated electricity market.
How Does Deregulation Work?
The deregulated electricity market separates processes that have historically been together. The key processes in getting energy where it needs to be are generation, transmission, and distribution:
- Generation is the production of electricity from raw materials. These materials can be non-renewable, such as coal or natural gas, or they might be naturally occurring, such as solar and wind.
- Transmission is the intermediate step in which large quantities of energy move from the generator to the electrical grid.
- Distribution is the last stage, in which electricity is sent to homes and businesses through the wires you see connected to telephone poles.
Source: Con Edison
If your power goes out, you follow the same procedure you always did. Your local utility is still responsible for fixing downed power lines and resolving other disruptions to service.
Your utility company cannot and will not discriminate against you if you start buying electricity from another company since they are not able to profit off the sale of electricity. Keep in mind that even in a small neighborhood, different households likely all have different plans.
What Will My Bill Look Like?
In most cases, you’ll still receive the bill from the utility company responsible for power distribution. The only difference on your bill will be in the section where you’re billed for electricity, in which you’ll see a new rate coming from your new provider.
To make better educated decisions on finding the best plan for you, visit our section on comparing electricity rates to learn how to find a contract that will save you the most money.