Electricity Deregulation

“The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.”

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Historically, the total electric service you received was provided by the electric utility in your geographic area. This included both delivery and supply.

Electricity deregulation has occurred in 21 states including Maryland, and it is expected to take effect in additional states in the near future. Restructuring, as it is sometimes called, came with promises of lower electricity prices and greater choice of suppliers. Instead it has brought wildly volatile wholesale prices resulting in substantial rate increases. Deregulation is also known as: “Retail Market,” “Competition,” “Electric Choice” and “Open.”

Since 2004, commercial customers in Maryland have had the ability to choose the company that provides the generation (supply) portion of their electric service. The utility continues to provide the transmission and distribution (delivery) of the electricity to your place of business. The utility also continues to service any power outages or infrastructure (lines and transformers) problems.

Commercial customers are now permitted to choose whether to remain with the utility for generation (supply) or switch to a retail electricity provider.

Electing to stay with the utility to provide the generation portion of your electric bill means accepting their standard offer service or default rate, a rate established on wholesale market conditions, plus an administrative fee and taxes. Customers may switch at any time, with no restrictions or switching fees from the utility. For those customers who choose to switch suppliers, the delivery part of their service continues to be provided by the utility. Customers who do not choose a supplier typically pay higher rates and are subject to unexpected increases as the market changes.

Choosing an electric supplier means finding the licensed generation company that offers the best rate and terms for your business or organization. This is referred to as their electricity supply “product.” If your business is large enough, suppliers will compete to provide your electricity product. Small and medium-sized business, however, often find it difficult to negotiate favorable rates on their own.

Synergetic Energy Pools forms energy buying pools to bring together businesses, nonprofit organizations, municipalities, and others to create larger electricity loads for the purpose of securing fair rates, favorable terms and long-term budget certainty.

Is there an Energy Buying Pool forming in your area?   Click here to find out.

Synergetic Energy Pools, Inc. is an energy procurement consulting firm dedicated to strengthening local economies by assisting small and mid-sized businesses in the formation of energy buying pools in partnership with Chambers of Commerce and other member-based Associations and through open enrollments.