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One source of power supply creates commercial monopoly and energy deregulation is a move towards fixing this controlling power. In previous years, the set-up in the energy industry in all states has always been that one local company, or a very small number of local companies, was the only provider of power supply. What's more, this lone company or this minority of companies are not only a power resource but also manage and control all the sectors relating to the commodity–production, marketing and selling, distribution, billing and support to customers. It was a system where one, or a few, were given official exclusive authority to organize, control and adjust the energy supply of the local market. This situation allowed a monopoly of some sort in each state's energy industry. The dominant market position permitted controlling power and the effects have led to some disadvantages: • The consumers had few choices (or only one choice) of supplier. • Monopolies were able to increase prices without restraint to cover for their costs and profits. • Monopolies were able to reduce quantity of supply to increase prices. With deregulation, some or all the sectors of the energy industry have been split into component parts. As a result of the divisions, one company or few companies no longer have complete control of the energy industry. Separate companies now own and run the power plants. Independent subcontractors operate as retail suppliers. Salesmen function as self-sufficient marketing agencies. Standalone companies manage billing and support services. The scenario will differ from state to state as rules of deregulation will differ for each state, but on the whole, energy deregulation has broken up the monopoly. 1) The local utility company is no longer the only option for energy supply. 2) Consumers can now choose their energy supplier and purchase their energy supply directly from Energy Saving Companies (ESCO's) who either produces the energy or buys it on your behalf to sell to you 3) With the increase market competition, energy suppliers are compelled to keep prices down and improve their services to retain customer loyalty. With deregulation, the consumer has enormous advantage: • Consumers have the power to choose from whom they buy their electric power from • Consumers have the power to choose from a wide offering of competitive products, terms and prices. • Consumers have the power to choose the best supplier that can support their individual energy needs • Consumers can rely on a steady supply of energy as guaranteed by the public utility commissions (PUC) in their state. • Consumers gain price protection from market fluctuations • Consumers can collect potential savings, including tax savings in some states Currently, only 41 states in the U.S are deregulated at some level. Is energy deregulation available at your state? You can find out from your local DOE unit or your local utility company if energy deregulation is available for you.
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