The deregulation of electricity markets began around twenty years ago and California and Rhode Island were the first states to give consumers the power to choose their energy suppliers. Since that time, nearly half the states have opted for deregulated electricity markets. Energy industry deregulation was intended to break the statewide monopolies which gave energy companies complete control over the source of energy, pricing and delivery options. Deregulated electricity markets give these choices to the consumers instead, making the industry more competitive and innovative.
Separating energy production from delivery
One of the most important things achieved by deregulated energy markets was the separation of energy production from delivery. The utility that delivers your energy is actually barred by law from producing energy. This gives consumers the choice of power suppliers. They can choose to get their electricity from renewable energy companies, and they can shop for better rates.
The utilities which used to control all aspects of energy production and delivery are now limited to delivery only. With consumers able to choose the source of their electricity, power companies have had to become more competitive. They now offer energy produced from renewable sources like wind and solar, following consumer preferences. They also have to offer competitive rates.
Newer appliances can lower your energy bills
While deregulated electricity markets have resulted in lower prices, there are other steps consumers can take to reduce their energy costs. Air conditioners and water heaters are the two biggest energy users among household appliances. In fact air conditioners account for nearly a fifth, or 19% of all residential energy use. And water heaters account for around 14 to 18% of a typical household’s energy bills.
Replacing older appliances with new energy efficient ones can make a big difference to your energy bills. Newer appliances use much less electricity while they are much more effective than older ones. Replacing an older water heater with a tankless water heater can dramatically lower energy costs.
Refrigerators too are much more efficient now, and on average refrigerators today use 75% less energy than they did in 1975. They cost 60% less than they did in 1975 and are 20% larger than the older models.
Other ways to reduce your energy costs
Some of the old tried-and-tested methods work very well. You’ve probably heard that insulating your house, specially the windows and attics, can save on heating and cooling costs. It does work, and so does setting your thermostat just a few degrees lower, at 68F instead of 72. Using a programmable thermostat to lower the temperature when you’re not at home can reduce your heating bills by up to 10% each year.
In a world where so much seems wrong, it’s heartening to see consumer values like conserving the natural environment actually having an impact. Energy companies are choosing to go green in response to strong customer preferences for renewable energy sources. You can multiply the positive impact by using energy efficient appliances and making your home energy efficient as well. Reducing your energy bills makes life easier for you and it helps the environment.