In numerous states across the country, the introduction of electricity deregulation brought about great change for both residential and commercial consumers, as well as their utilities.
With the birth of deregulation, new retail electricity providers (REPs) opened up creating large competitive markets in states like Ohio, Texas and Pennsylvania — to name a few. Consumers were given the opportunity to shop around and purchase electricity from companies other than their local utility, sometimes drastically reducing their monthly electric bills.
Major Utilities in Deregulated Markets
Local utilities still have major responsibilities in deregulated states and areas, regardless if a consumer purchases their electricity from them or a local retail electricity provider.
Atlantic City Electric
It’s the responsibility of the local utility to handle all of the operation and distribution involved with connecting homes and businesses to the power grid.
Utilities have grid operators constantly monitoring the stability and safety of the grid, assuring everything is functioning properly at all times for consumers. This isn’t the responsibility of individual retail energy providers (REPs). These companies simply buy energy generation and sell that electricity to individual residents and businesses.
Regardless of the supplier of electricity, your current local utility will still handle the distribution of the electricity to your home or business. You’ll notice a distribution portion of your electric bill with charges — these charges come from your utility. A distribution portion of an energy statement makes up roughly 20% of the total bill.
Ultimately, it’s important to remember that while suppliers buy and sell energy, it is still the responsibility of the utility to distribute that energy to each individual property.
Provider of Last Resort (POLR)
Utilities in deregulated states are often still required to act as the Provider of Last Resort.
Essentially, the utility must act as a “back up” electric service in each of the areas that they cover. Many times this means that the utility will still make certain a property has electricity, even if the owner of the property has not purchased a plan from a supplier, or if they forget to renew or transfer electricity service. In these situations, the utility will step in.
POLR comes with higher than usual rates and is only meant to be a temporary solution.
Maintenance and Repairs
Utilities, regardless if they’re located in a regulated or deregulated area, is still responsible for the power lines, grids and poles found throughout their territory. REPs are not in charge of this equipment; it is still owned and managed by each utility.
This means that when there’s a power outage or damage done to one of these poles from a storm, car accident, etc., it’s the utility?s job to fix them. Customers often think they need to call their REP during outages and emergencies such as this, but they instead need to call their utility directly as they always have.
In addition to handling emergency repairs, utilities are also responsible for providing routine maintenance to their infrastructure to ensure it continues to function properly.