Frequently Asked Questions (FAQs)

About Energy Deregulation

What is Energy Deregulation?
In general, deregulation attempts to use free market forces to achieve competitive pricing, ensure adequate supplies, allow greater innovations in product offerings, and promote better services. A key aspect of retail energy deregulation is that it removes the restrictions of forcing you to purchase both electric delivery and generation services from a monopoly. That is, electricity generators/power plants are separated and independent from the distribution utilities, the utilities continue to retain sole responsibility for the transmission and distribution of electricity from generators to consumers, while you gain the option to purchase electricity from one of the competing electric retailers other than the utilities.

It is important to note that deregulation and competition does not mean free for all. The deregulated energy market place is still highly regulated, both in terms of how the market participants function and in consumer protection.
How does deregulation work from my perspective as a consumer?
A consumer makes his/her own decision in subscribing electricity purchases from an electric retailer of their choice. An electric retailer purchases electricity wholesale either directly or indirectly from electricity generators for the retailer's own customer use. Generators transmit the electricity to the local utility companies, which in turn distribute the electricity to the consumers.
What if an electric retailer goes out of business? What happens then to its customers?
The consumers are fully protected. There are stringent rules and procedures in place to insure no service interruption. The consumers will switch to another retailer of their choice, or return to the utility company as the default supplier.
Why does my utility company tell me that I can only purchase electricity from them?
Not all states are deregulated. Each state's lawmakers make their own rules. If you live in a state that is not deregulated, you can only buy electricity or natural gas from your utility company. Go ahead and sign up online with us anyway letting us know of your wish, and we will notify you soon after your state adopts deregulation so that you may make your choice then.

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The Choice Energy Team

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