I have been reading a lot about these so called energy company scams.
I know the energy companies and the energy market as a whole are not the easiest things to understand. I sat down with my Grandmother and talked to her for two hours about the how deregulation works.
A question that I had to answer was
“Is deregulation a scam?”
If it is a scam why did it happen in the first place?
Call us at 1-800-971-4020 to see if you leave in a deregulated area
The truth is that deregulation is not a scam but let me explain.
Let’s start from the beginning; the power plants. The power generation companies own the power plants and produce the electricity. “What is a power plant?” Ok I do not have the time to explain everything. I will skip over a couple of things that I assume you know (i.e. what a power plant is).
Energy Suppliers own the lines that go all over the place along with the meters. This is how you get the electricity from the power plants to your home. If a tree falls on the power line you call the energy suppliers.
“So who do I pay?”
That is a great question. If you don’t pay the power generation companies and the energy suppliers than who do you pay?
Electricity providers. That’s right, you pay the electricity providers. Why? “If the electricity providers don’t own the power lines or the power plants then why do I pay them?”
This is because they contract with the power generation companies for X amount of electricity with a certain heat rate. Then they mark up the price of electricity to sell to you for a profit.
“Why do I pay more than the electricity providers do?”
Here is the alternative: REGULATION.
Electricity regulation is based on what the Public Utility Commission of (whatever state you live in) sets the electricity price to be.
Still sound likes a scam.
Think about this for deregulation; if the energy market drops in price, some electricity providers are going to try to buy at that lower price to sell to you. For regulated areas, if the energy market drops in price, you will still pay the same electricity rate unless the Public Utility Commission lowers the rate.
“So will my electric bill be lower in a deregulated area?”
My answer to that is “More often than not.”
Electricity Scams are out there.
Now that you understand a little bit more (I hope) about deregulation,
compare our electric rates using our comparison tool to the upper right.
All you have to do (if you leave in a deregulated area we serve) is type in your zip code and click compare.
If you’re a commercial customer, click here or use the same compare box and just change the drop down box from “Residential” to “Commercial“ and click compare.
A good place to look for electricity scams is the PUCT website.
If you get your electric bill and you feel that there is some kind of “electricity scams” happening contact the Public Utility Commission.
{ 1 comment… read it below or add one }
My PSE&G bill was $80.00 more because of the deregulated 3rd party billing–looking back over previous months most were over billed also—I think it’s a scam
I’m next checking on my SJ gas bill—It looks way over charged also!
Who allowed/ passed this reformation/ deregulation of banking and energy co’s??? didn’t they PROTECT THE AMERICAN CONSUMER FROM FRAUD???