You Have The Power To Choose Your Electric Company

Formerly, a single utility company provided three components of energy services: generation

, transmission and distribution. The Public Utility Commissions (PUC) and Legislatures of many states have created competition between suppliers for the use of electricity and natural gas. This competition now allows consumers to select their energy supplier, while the delivery of the energy is still regulated and is the responsibility of the local utility company. This regulation has occurred at both the state and federal level.

In the past, regulation of the electric power industry was unheard of. Small electric businesses operated on small generators in public areas and sold that power to industries and other users in that area. It was not until 1896, when Westinghouse discovered the use of alternating currents to transport electricity over long distances from their hydroelectric plant in Niagara Falls. This transporting and delivery system was extremely efficient, so it rapidly became the national standard. Because of this method to provide electricity, public utility companies submerged.

Soon after it became obvious that production, distribution and sale of electricity was becoming a monopoly. In some cities they established publicly owned utilities, but for the most part, private corporations provided power. Even though these electric companies did purchase some electricity, their company generated most of what they sold. This clearly became a monopoly because it made common sense to only have one set of power lines leading to each consumer. Because of this, many U.S. states quickly established the Public Utility Commissions (PUCs), to regulate the sale of electricity to customers. The standard type of regulation stated that the utility company would justify its prices by accounting for the cost of producing, distributing and marketing the electricity and would then be entitled to a rate of return.

In the U.S. many states have led the way in changing legislation to reorganize the electric power industry through deregulating the production of electricity. Although, power companies maintain ownership of transmission lines, they cannot control access to them. This accountability has been passed to a non profit organization called an Independent System Operator (ISO), which maintains transmission of all electricity in the area. There are currently five ISOs in operation throughout the country. The consumer should understand the importance of these changes, allowing them to find the best deals, rates and offers that any service provider has in their state.

With so many power companies and providers trying to compete with each other, selecting the best company is often difficult. There are some basics things to consider when choosing your energy provider, such as read the electric facts label. This tells you how much electricity you will pay for. Next, be sure to select a company and plan that has adequate cancellation fees if you decide to switch plans or providers half way through your contract. Third, make sure the provider you choose has stable and affordable price rates that will not be affected by sudden price increases. Fourth, do not only consider price, but also quality service and customer satisfaction. Lastly, compare the company's plans and services. You will most likely find that quality service and reliability is vastly improved because of the increase in competitiveness between energy providers.

by: Terry Mickelson

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