What is changing and what is staying the same?
| Regulated System |
Before Electric Choice, your utility company was responsible for all aspects of electric service. Your utility bundled all of its services into one price. They were responsible for managing power plants that produced electricity and for delivering electricity over their wires to you. Since these companies were regulated monopolies, you could not choose who supplied your power.
| Deregulated System |
The bundled services that were provided by your electric utility company have been divided into two parts. Your regulated electric utility will continue to transmit and deliver your power over the existing wires. This company is now referred to as a distribution company. However, the power running through those wires is now sold by companies known as competitive power suppliers who purchase power from independent generators. Please note that some states have different names for competitive suppliers, such as Alternative Retail Energy Suppliers [ARES], Electric Supply Companies [ESCO], or Retail Energy Provider [REP].
| Buying Electricity Is Now Like Buying Telephone Service |
The changes to the electric industry are somewhat similar to what happened when long-distance telephone service was restructured nearly twenty years ago. At first, customers were free to choose a new long-distance company, but they had no choice about which company provided their local service. Similarly, in the newly restructured electric industry, you are free to choose a competitive supplier while your local utility remains the same.
| Rate Determination and Billing |
The prices for the services provided by your distribution company continue to be regulated by the state. The prices that competitive suppliers charge for power generation are not regulated. Instead, each competitive supplier establishes their own price for their products, similar to the sellers of most other products. In most cases, you will now receive two bills for your electric services, one from your local utility for delivery and one from your power supplier for the amount of electricity you use.
