How a competitive energy market may help your business

CI.EN.DG CBF Article 2

By choosing a supplier, you’re also supporting greater competition in the energy market, which can have an impact on energy costs for your and others businesses.

In many industries, competition is commonplace. This is beneficial for companies and individual consumers alike, allowing a greater number of businesses to participate in the market, while giving consumers more choices when it comes to selecting products and services.      

The case of the energy industry is quite different. Unless a state is deregulated for a particular energy commodity, such as natural gas or electricity, consumers can only purchase the supply from the utility.

What are the differences between a regulated and deregulated utility marketplace?

Deregulation takes place on a state-by-state basis and has to be voted into law to allow consumers an opportunity to choose their independent energy supply provider. In a deregulated market, the utility still handles the delivery of the energy, and is responsible for maintaining the infrastructure (such as pipes for natural gas and wires for electricity).  

If you conduct business in a regulated state:

You will receive the energy supply and delivery from the utility. However, utilities are regulated by the state’s Public Utilities Commission (PUC). This regulation doesn’t allow utilities to be as flexible with their product offerings, which means they can only set prices at certain times and that their prices may vary frequently.

If you conduct business in a deregulated state:

Electric and gas utilities own the lines and wires that deliver the energy to your business. You have the ability to choose whether to purchase your energy supply from either the utility or from a competitive energy supplier.

What are the benefits of deregulation for commercial consumers?

Deregulation allows commercial customers to choose a supplier that meets their unique needs. By removing the utility monopoly on supply, energy companies have a greater ability and are incentivized to innovate their products and contain costs, because there is more competition to acquire and retain customers. 

Whether you’re interested in pursuing energy monitoring programs or sustainable energy solutions for your business, your options tend to be more extensive in deregulated states.

How can you participate in a competitive market?

If your business is located in a deregulated state, you likely receive calls and direct mail from suppliers interested in securing your natural gas and electricity business. Taking the first step in participating in the competitive market starts with reviewing available offers and asking to see copies of suppliers’ contracts. This will help you understand more about how they price for their products and any additional fees that could be assessed.       

By choosing a supplier, you’re also supporting greater competition in the energy market, which can have an impact on energy costs for your and other’s businesses.

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