Regulated and Deregulated Markets

Understand the Key Differences Between Regulated and Deregulated Markets

Regulated Market

• Price Controls:

  • Set by Authorities: Electricity prices are typically set or approved by government or state regulatory bodies, ensuring that rates are stable and predictable.

  • Limited Competition: Electricity providers are often monopolies or have limited competition within a designated geographic area.

• Involvement of Utilities:

  • Utility Coordination: Utilities are typically responsible for the transmission and distribution of electricity, and they often handle the billing and customer service aspects.

  • Net Metering Policies: Policies for net metering (the ability to sell excess solar energy back to the grid) are usually well-defined and regulated by state authorities.

• Consumer Protections:

  • Regulatory Oversight: There are stringent consumer protection laws and regulations in place to safeguard customers' interests.

• Incentives and Rebates:

  • Government Incentives: Regulated markets often have structured incentive programs, rebates, and tax credits regulated and managed at the state or federal level.

Deregulated Market

• Price Variability:

  • Market-Driven Prices: Electricity prices fluctuate based on supply and demand. Consumers may have the option to choose from different plans and providers, leading to potentially lower rates but also higher variability.

  • Increased Competition: There is more competition among electricity suppliers, which can drive innovation and better customer service, but also complexity in choosing the best plan.

• Involvement of Retailers:

  • Multiple Providers: Customers can choose their electricity supplier from a variety of retailers, although the local utility still typically handles the physical delivery of electricity.

  • Diverse Offerings: Retailers may offer a range of products, from fixed-rate plans to variable-rate plans, and even green energy plans that can complement solar installations.

• Consumer Choice and Flexibility:

  • Plan Options: Customers have more options to tailor their energy plans to their specific needs, including those that integrate with solar power or other renewable energy sources.

  • Contract Terms: There can be a variety of contract lengths and terms, providing flexibility but also requiring careful consideration to avoid unfavorable conditions.

• Incentives and Rebates:

  • Market-Driven Incentives: Incentives and rebates can vary widely and may be offered by individual electricity retailers or through market-driven programs. These may not be as standardized or predictable as in regulated markets.

Identifying regulated versus deregulated markets

REFERENCE

Review the Customer's Location

• Check if the location is served by a municipal utility, electric cooperative, or regulated company (use the provided list).

• If listed, the area is regulated.

For Deregulated Areas

• Confirm the utility in the Usage Phase corresponds to the TDU (not the REP on the bill).

• Use the "Determine the TDU" table to identify the correct TDU based on the REP or outage reporting phone number.