Electricity deregulation, also known as market restructuring, allows businesses and consumers to choose their electricity supplier rather than being locked into their local utility’s standard rate.
How Deregulation Works
In a fully deregulated market, electricity supply (generation) is separate from distribution (delivery). Consumers can shop for competitive rates from third-party suppliers while the local utility company, or Local Distribution Company (LDC), remains responsible for delivering the power and maintaining infrastructure.
However, most deregulated states still offer a default supply option—meaning businesses and consumers can choose to buy power from the utility if they don’t select a third-party provider. While this fallback may seem convenient, it is often not the most cost-effective option.
Why Deregulation Matters
Before deregulation, utilities operated as vertically integrated monopolies, controlling both power generation and distribution. With restructuring, utilities in deregulated states have either:
✔ Sold off power plants to independent energy suppliers
✔ Separated their generation assets from their regulated distribution business
This shift has created an OPEN competitive market for electricity supply, enabling businesses to take advantage of lower rates, customized contract terms, and risk management strategies that suit their unique energy needs.
At OPEN Energy Services, we help businesses navigate deregulated markets, securing the most competitive electricity supply contracts while ensuring budget stability and long-term cost savings.