Energy Deregulation FAQS
Q: When did electricity deregulation begin?
A: The deregulation of the electric utility industry began in the early 1990’s when open access to the wire system that delivers electricity to the commercial and residential markets was guaranteed by Federal legislation. The primary objective was to increase competition in the generation and sale of electricity. This was a very significant development in American commerce since the electric industry produces more than $200 billion in annual revenues to industry participants. Deregulation is now being implemented on a state-by-state basis over a period of years, which contrasts long distance telephone deregulation that was done on a national level all at once.
Q: What is deregulation?
A: Deregulation enables legislation and agreements between the state’s regulatory body (normally the public service commission or the public utility commission) and the utilities operating within the state. The deregulation of the electricity and natural gas industries creates opportunities for businesses to reduce total expenses by enabling businesses to select suppliers for the best combination of price and reliability. The primary objective of deregulation is to create a competitive market, resulting in lower energy costs. This is working; the number of suppliers in the market is increasing, leading to more competition and lower prices.
Q: What do I have to gain from deregulation?
A: Electricity deregulation allows individuals and businesses to shop for the electricity portion of their bill. In a deregulated market, the supply component of electricity is approximately 50 percent of the monthly bill (although it can be as high as 75-80 percent in some areas). The remaining portion of the bill contains the costs for transmission, distribution, servicing, and administration, which are maintained by the local utility. This means the local utility will continue to service the account and deliver electricity through its wires, regardless of the supplier that actually generates the electricity that is used by your business.
Q: What happens to my local utility when it deregulates?
A: In order to create a competitive electric market, your local utility is required to separate its generating assets (power plants) from the delivery and services part of the business. It continues to be regulated, deliver electricity, own and maintain the wires, provide service, and render customer bills. No longer in the business of generating power, it is indifferent as to your source of electricity.
Q: What has stayed the same in electric and natural gas service with deregulation?
A: Your current Transmission and Distribution Utility, continues to deliver electricity and natural gas to your business. Your local utility company still responds to service interruptions and continues to maintain the poles, wires and pipelines. You will continue to receive the same reliable service you are used to with your local utility company, regardless of which energy provider you receive supply from.
Q: What has changed in electric and natural gas service with deregulation?
A: As a result of deregulation, you can now choose to buy your energy from a different provider than the local distribution company in your area. These competing companies are called retail energy providers and now own the power generation plants.
Q: With deregulation, will the reliability of my electric or natural gas service change?
A: No. Regardless of which energy provider we help you choose, your electricity and natural gas will continue to be delivered safely and reliably by the local utility company which is still regulated by the Public Utility Commission.
Q: What happens if I have an emergency or power outage?
A: Since your local utility company is still responsible for the maintenance and repair of the poles and wires, you would call them in the event of an emergency or power outage.
Q: Who will the bill come from?
A: Once you have chosen an energy supplier, there are two different scenarios that can occur. One is that you will receive two separate bills – one from your distribution company and one from your competitive power supplier. The other scenario would be a single bill – it would be a combined bill that would contain both the distribution company’s charges and the competitive power supplier’s charges. It all depends on the supplier that you choose and their arrangement with the distribution company.
Q: Does everyone have the option to choose a new electricity or natural gas provider?
A: No. City-owned utilities and member-owned electric cooperatives have the option of giving their customers a choice of providers, or keeping things the same.
Q: Why use an energy procurement advisor/broker like Onyx Power and Gas Consulting?
A: The answer is simple: we save you time and money. Staying in-tune daily with energy markets, providers, and new opportunities is a full-time job. With Onyx you can capitalize on the benefits offered by deregulation without committing significant time and resources to understanding the complexity of the markets.We get to know your business and your specific energy needs. Then we negotiate with energy providers on your behalf to get the best rates and options. After you have an agreement with a provider, we continue to service your business, and in case your needs change we are there to renegotiate new agreements that fit those needs. We do all the work. You receive all the benefits, including no out of pocket costs!
Q: Will I notice a change of service when I switch my energy provider?
A: No. No matter which energy provider you choose, your energy will continue to be delivered safely and reliably by the local utility company.
Q: What happens if my energy provider stops serving customers?
A: Rest assured, you would not be without energy. Your local distribution company will continue to deliver energy to your facility. In the unlikely even this were to happen, Onyx would work with you to place you with a new energy supplier as quickly as possible.
Q: Why should I choose Onyx Power and Gas Consulting?
A: Onyx Power and Gas Consulting is a national energy management and procurement firm assisting business leaders and homeowners nationwide with implementing strategies that lead to more affordable energy usage. Our community-focused directive means we’re able to use our more than 30 years of combined experience as a competitive advantage in “Making Energy Make a Difference.”