Electricity provider switching

Electricity provider switching is the ability of power consumers to have an option—or the "power to choose"—their electricity provider in a deregulated electricity market as permitted by a state public utilities governing body.

Australia

The Australian market has been somewhat deregulated, but still sees consumers provided with a narrow band of choices. Due to these deregulations, companies are springing up to help consumers find the best priced electricity, which given it is a commodity has allowed for downward pressure on pricing and a more affordable quality of life for the average Australian.

Canada

Electricity is deregulated in two Canadian provinces: Ontario and Alberta. Both markets showed price spikes in the first year of dereguation, but then settled down into a volatile but reasonably stable environment. Alberta's market is dominated by fossil fuel generation and as such reacts more closely to the price of natural gas. Ontario's generation mix is about 50% nuclear.[1]

Ontario

The consumer has the choice between buying from their local utility (Local Distribution Company - LDC) or from one of the deregulated suppliers. There is a large range of contract options from a variable price to 1,3 or 5 year fixed prices. Electricity provider switching is difficult once the consumer is in one of these contracts, unless they are close to the end of a fixed price contract. However, as of January 2010 there is a maximum termination penalty allowed.[2]

A very important element in switching electricity providers in Ontario is understanding the Global Adjustment.[3] This is an adjustment for some commitments government agencies have made on your behalf. It is included in the LDC Regulated Price Plan, but is an additional line item if a contract is signed.

Alberta

The consumer has the choice between buying from their local utility (Local Distribution Company - LDC) or from a deregulated suppliers. There are however many fewer of these in Alberta. Electricity provider switching is difficult once the consumer is in one of these contracts, unless they are close to the end of a fixed price contract.

There is a price comparison service operation in Canada.

France

In France, electricity market is totally deregulated and consumers have the choice between the historical formerly state-owned provider EDF and several new private providers like Direct Énergie.

United Kingdom

Electricity supply has also been deregulated in the United Kingdom. For a list of suppliers see: Category:Power companies of the United Kingdom at the foot of the page.

United States

In deregulated markets such as Texas and Maryland, the state government may require the incumbent utility energy provider to allow for unlimited competition within the marketplace, where the consumer is free to choose any electricity provider. Electricity provider switching is only practical if a customer is either buying from a utility or is at the end of a fixed-price contract with a provider.

Certain U.S. states allow for consumer choice in electricity providers, with Texas being the most-widely watched deregulatory scheme. Many other states are surveying the Texas deregulatory model in order to use its design as a model for the imposition of free market forces within such other power markets.[4]

As of April 2014, 16 U.S. states and the District of Columbia have deregulated electricity markets. Along with aforementioned Maryland and Texas, electricity deregulation is current in Connecticut, Delaware, Illinois, Maine, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Rhode Island. Seven additional U.S. states began the process of electricity deregulation but have suspended efforts: Arizona, Arkansas, California, Nevada, New Mexico, Virginia, and Wyoming.[5]

See also

References

  1. ↑ Ontario Power Authority Long Term Energy Plan http://www.powerauthority.on.ca/sites/default/files/page/MEI_LTEP_en.pdf
  2. ↑ Ontario Energy Board http://www.ontarioenergyboard.ca/OEB/Consumers/Consumer+Protection/Retail+Energy+Contracts/Before+Signing+an+Energy+Contract
  3. ↑ Independent Electricity System Operator http://www.ieso.ca/imoweb/siteShared/electricity_bill.asp?sid=bi
  4. ↑ "Electricity Deregulation Map of the United States". Electricity Local. Retrieved 2014-04-24.
  5. ↑ "Electricity Deregulation Map of the United States". Electricity Local. Retrieved 2014-04-24.


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