To put it simply, deregulation is the reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.
An example of deregulation is the telecommunications industry. Before deregulation, the government had control over telecommunications, which meant people were not able to choose their phone provider and there was only one available to them. It was not until the 1980’s, when the industry became deregulated, that consumers were given more choices and offered competitive prices.
Deregulation of the telecommunication industry led to tremendous leaps in technology, and a greater push for innovation. In fact, the mobile phones we have come to rely on were possible because of deregulation. If the telecommunications industry had not been deregulated, it is very possible that customers would still be tied to a phone cord today.
How does this impact my business?
The same idea can be applied to the energy industry. Energy deregulation in particular involves the restructuring of the existing energy market, and mainly seeks to prevent energy monopolies. In the states that deregulate energy, business and residents can choose who supplies their natural gas and/or electricity – and those businesses are not limited to working with your utility.
The utility still delivers the energy through their pipes and wires. However, a utility is strictly focused on delivering the energy itself. Suppliers on the other hand, purchase the natural gas and electricity directly from producers, and, unlike your utility, can offer more than just energy. They are able to offer more options which allow customers to take advantage of a variety of products and services that are customized to different business, and can potentially save customers money and decrease their energy consumption.
Energy brokers provide additional value to customers. People often think they benefit when buying directly from a supplier by “cutting out the middle man”, however, a direct supplier is only a single source option, whereas brokers are often able to source from multiple suppliers to accommodate a business’ strategy. A broker works for their clients and as a “buyer’s agent” and consultant – they do not to sell energy or favor any particular supplier. They do the work for a by shopping around in order to find the best price and a better way to manage a company’s energy spend over time.
Although their focus on custom care can differ widely, the emphasis on quality service, continued innovation, and diverse products are usually what give brokers staying power.
They rely heavily on lasting relationships built on trust, and additional products and services that complement natural gas or electric service are also can set a broker apart.
When making the decision between brokers and suppliers, it is recommended that you choose a broker that is transparent and is able to offer flexibility. Many brokers can offer products and services that can be completely customized to fit your business’ needs. It just takes a little research to find the right fit.
About our sister companies
EMEX, LLC is a national leader in energy procurement and reverse auction technology. EMEX transacts annually in hundreds of millions of dollars of electricity and natural gas products for business and government entities, making it one of the largest privately-held energy consulting and risk management firms in North America. EMEX’s reverse auction platform has created a strategic shift in how energy is bought and sold throughout the country and is now considered a best practice for energy procurement.
Patriot Energy Group is one of the largest and fastest-growing retail electricity and natural gas management firms in the country that operates in all competitive markets throughout the United States. As a client-side energy broker and advisor, Patriot Energy Group works closely with its customers to help manage risks associated with energy costs. Patriot Energy Group has a 17-year proven track record of energy procurement, representing over $500 million in energy spending. Patriot Energy Group offers professionally managed and diverse energy purchasing strategies, which combine unique fixed, index, and hybrid rate structures, as well as a comprehensive suite of energy efficiency and management options.