Competition drives the free market, raising the level of productivity, streamlining business efficiencies and, in theory, lowering the price of goods and services for everyone.
This is the basic rationale for why the natural gas market has been deregulated in many states as regulatory reform was developed to change the way consumers pay for natural gas.
Natural gas consumers today in deregulated markets have the option to shop around and purchase their natural gas from the retail marketer who offers the lowest prices and best customer service. There are 21 states, plus Washington, D.C., that offer deregulated gas markets.
Enrollment in these Natural Gas Choice programs has been growing since 2008. About 35 million residential natural gas customers are taking advantage of their options and purchasing natural gas from retail marketers. These programs vary from state to state.
Right now Georgia and Ohio have the highest number of residential natural gas customers who have decided to purchase natural gas on the competitive market. New York and New Jersey have the lowest participation rates, even though they have a wide range of natural gas options.
In states like Texas, where deregulation has been a central theme surrounding electric and natural gas industries for more than 10 years, the market has hit its stride. While there have been bumps and bruises along the way, consumers are motivated to switch marketers when retail marketers have worked hard to retain their customers and keep their prices attractive to buyers.
When marketers in deregulated natural gas states offer consistent low and stable prices, promotions or discounts for new customers and some type of rewards programs for existing customers as an incentive to retain their services, then natural gas marketers have found themselves profitable and able to attract and retain their customers.
If you live in a regulated natural gas state, you must buy your natural gas from the utility company that provides those services where you live. You can’t select another supplier.
Natural gas has always been regulated to some degree by the government. By the 1980s, the push began to deregulate the industry. In theory the act of deregulation allows all natural gas customers the same right to access the natural gas transportation system and the option of “open access,” or making their own gas transportation arrangements from the pipeline to their home or business.
The natural gas industry then unbundled its gas supply services from gas delivery services. Natural gas marketers are not directly regulated by the federal government, as far as their gas rates and other related issues. These local distribution companies are typically regulated by state public service commissions. These commissions oversee their rates and make sure that all procedures are done well to ensure that customers have access to natural gas and that the supplies are properly maintained.
If you live in a deregulated market, nothing should change if you decide to buy natural gas from a marketer. Your local utility provider will maintain your billing account and you won’t experience a disruption in your natural gas services.
