Energy Choice and the Power to Choose
Energy choice is becoming a new trend in many states. Texas was one of the first states to open up the market to full deregulation back in 2002, thanks to Texas Senate Bill 7 (SB7). Energy choice advocates in other states are pushing for full-electric deregulation, using Texas as the prime example. Thanks to SB7, electric suppliers now have to compete with each other to earn your business. This competition has the effect of pushing down prices with the result of Texas now having some of the lowest energy costs in the country.
For customers who have been accustomed to the old way of the utility handling everything, electricity deregulation may be a frightening thought. However, there are many benefits of being able to choose a competitive retail electric supplier, and the overall process is simpler than one might think. There are two main components of the electric bill, the delivery charge, and the supply charge. If you decide to switch over to a retail electric supplier, you can still receive one electric bill incorporating both the delivery and supply charges.
The delivery charge makes up the regulated portion of your electric bill. These charges will be billed to you by your local distribution company (LDC) and are regulated by the Public Utility Commissions. The delivery charge is the cost of maintaining the lines and wires to deliver the electricity to your residence or place of business. You will not be able to shop around for these charges. If you experience a power outage after switching to a retail electric supplier, the LDC will be responsible for fixing the issue.
The supply charges make up the deregulated portion of your electric bill. This charge is the cost of generating electricity. Once the electricity is generated, it is sent to your utility company which is then responsible for delivering the power directly to the consumer. Energy choice gives the consumer the power to choose an energy provider that meets their individual needs. A business can now lock in the lowest rate possible at a given term or lock in a rate that is inclusive of 100% renewable energy. Consumers will have the satisfaction that they are saving money while at the same time helping out the environment.
It appears energy choice and the move toward energy deregulation will continue to be the wave of the future. With the simplicity involved in selecting a competitive supplier and the lower prices that follow, it is likely we can expect other states to follow suit.