Do you like your residential energy provider? Natural gas and electricity rates are an unpredictable expense for many families across the U.S., but with energy deregulation, they become easier to manage. When regions deregulate the energy market, monopolies disperse and households win. But how exactly are families benefiting from these policies?

Now that we have more choices than just the local utility, we’re seeing the separation of energy production from distributors. The beauty of changing providers without switching utilities is that customers can choose their policies and distributors to save money, and they can do it without excessive bargaining or installing new equipment. This is made possible by energy service companies.


By the definition of the National Association of Energy Service Companies, ESCOs are organizations that work with power suppliers to offer different services and rate plans than those of the utility. They do this by purchasing power from competing companies, so they are essentially the intermediary between energy generators and the utility distributors. ESCOs make this process easier by sorting through competing services and informing homeowners what preferable terms and rates look like. Since 1990, ESCOs have been credited by NAESCO for $50 billion in savings for customers, $30 billion of infrastructure improvements and 470 million tons of carbon dioxide savings without raising rates for residential customers.

The impact on the energy sector

According to U.S. Energy Information Administration, the national price of energy has been steadily growing across the country, increasing utility costs for Americans. Fortunately, deregulation is working to counteract this trend. When changing providers, you can opt into fixed-rate plans that tend to save in the long run, as they avoid seasonal price surges. With increased competition among providers comes new options for your power supply, including green energy. Most notably, the Compete Coalition, a group of professionals advocating for competition in the energy sector, found that regions with healthy levels of competition had lower rates than ones with fewer outlets.

Gone are the days where massive power plants dominate energy production.

Gone are the days where massive power plants dominate energy production.

Big results in Texas

If the successes of Texas, one of the first states to deregulate their energy market, are any indication of what deregulation can do for energy rates across the country, there is reason to be optimistic. The Texas Coalition for Affordable Power found that Texas energy rates are below the national average. Further, the upside to deregulating the energy sector is that there are many low-priced individual deals inside deregulated areas. Many of these plans employed by competing energy providers offer lower rates than areas that do not have the same regulations.

With Texas’ deregulation has come a bevy of different power supplies, such as natural gas and wind energy. Texas has been generating sustainable energy at such a high rate that the Energy Reliability Council of Texas reported that the state has produced 16,000 megawatts of renewable energy in 2015. Additionally, the oil and gas boom in the state is providing access affordable power like never before. Texas serves as an example of how deregulation can flourish throughout the country. Being able to choose your energy provider enables you to select the kind of power you want based on your preferences and market price of electricity.

When we have choices in the energy market, we take advantage of lower rates now, save money down the line, and create many new possibilities for powering our future in unexpected ways.