Everyone looks for ways to cut back on their spending and save money. However, when it comes to the bare necessities of life, sometimes there is no avoiding the cost. Take, for instance, your energy bill. You need both gas and electric to supply your home. Without it, daily tasks become nearly impossible to complete. That being said, if you’ve received an energy bill that you believe is out of this world, it may be time to adjust some things.
If you’ve already done common things like checked for airways near the doors and windows, installed energy efficient lighting, and tried to be more mindful of off commonly used appliances when they’re not in use, there is another option for you – switching service providers.
In times past there was only one choice for energy suppliers. Whichever company serviced your location was the company you were expected to sign up with. However, government laws have changed this a bit by introducing deregulation. Energy deregulation essentially means that consumers in qualifying areas are now given the ability to choose which utility company will supply their gas and electric.
A Deeper Understanding
Investopedia best describes deregulation as the act of removing or reducing government involvement in a particular industry as a means to create a more competitive environment. In relation to energy deregulation, it is essentially the process of replacing the dominant system for electric companies allowing for utility companies to compete for services. Such laws and regulations allow for the consumer to have more control in whom they choose to receive services from while still receiving delivery from their local utility companies.
To understand energy deregulation and what it means to you as a consumer, you must first understand how you’re currently billed. Ideally, you’re billed for the supply, transmission, and distribution of energy. Here is a breakdown:
· Supply – The first component of your bill is the supply or the generation of electricity. Government officials have deregulated this portion of your bill so that there is competitive pricing available to the average consumer based on supply and demand. Companies that actually produce energy are now able to make their supply available through the competitive market. So if you’re located in an area that is deregulated, you have the ability to choose from several energy companies, such as ENMAX in Alberta, to supply you energy at the best rates possible.
· Transmission – the transmission is the amount that you’re charged for transporting the electrical supply from the source to the utility company. This portion is still regulated by the government.
· Distribution – this part of the bill is essentially the cost of transporting the energy from the utility company to your residence or place of business. Choosing a company located closer to your location can save you money on distribution costs.
The Consumer’s Power to Choose
Now you have a better understanding of deregulation as it pertains to your energy bills. The overall benefit is your power as a consumer to choose where your energy source will come from. There are several comparison sites that allow you to search for the most qualified company in the area. You can compare rates and determine which company is best for you.
Out of all the weird ways to save money, you’ve probably never considered the option to switch energy providers. Deregulation laws have certainly made it a lot more convenient and affordable for consumers to get the energy they need. Whether you’re satisfied with your current utility bills or not, doing a quick online search to see if you’re in a deregulated area is simple. Who knows, you might be able to save even more money then you are now by choosing a new supplier? Simplistic energy price comparison websites make it easy for you to determine which option is best for you.
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
More from my site
Latest posts by Mr. 4HWD (see all)
- Tips to Pay Your Home Loan Off Faster When Working from Home - January 10, 2020
- 6 Tips for Reaching Out to an Influencer - January 7, 2020
- Creative Ways to Save Money This Christmas - December 24, 2019