There are only a few states in which consumers have the option to choose their electricity provider. If you are fortunate enough to reside in one of those states, then you have the ability to pick and choose among at least a few different providers for your electricity services. Ultimately, this means that you have the freedom of choice; one of the driving forces behind the American consumer market.
Advantages of Deregulation
One of the most obvious advantages of electricity deregulation is the simple elimination of the monopolies that currently exist in many markets throughout the United States. If healthy competition exists among providers, then consumers should reap the benefits. Deregulation provides us with more choices, which means consumers don’t simply get stuck with whatever electric company happens to own the domain in which they live.
Through deregulation, the average price of electricity per kilowatt hour should be regulated so that it is equal across the board. In locations without a deregulated market, prices tend to be skewed in certain regions, making the cost of electricity considerably more expensive in some parts of the country than in others.
Consumer satisfaction tends to be higher in deregulated markets simply because electric companies make more of an effort to ensure good customer service policies in order to keep their customers happy. In regulated markets, unhappy customers don’t have anywhere else to turn for electricity services, so the companies don’t have to worry about whether or not they have satisfied customers. Once again, the basic power of choice gives consumers the power to select and receive better service.
Ideally, electric companies should be forced to maintain higher performance standards in a deregulated market. If consumers have the power to make choices and switch providers at will, the companies offering these services should have to step up to the plate to meet the demands of their customers.
Possible Disadvantages of Deregulation
With an influx of competing companies in the electricity market, the possibility of eroding quality does exist if the new companies are not monitored properly. In order to maintain a high level of quality and reliability, systems need to be implemented that will help to ensure that services are consistently reliable and of a good quality.
In addition, new companies entering the market need to be carefully evaluated by a governing body to help prevent the formation of fraudulent companies that try to scam consumers out of money. If customers sign on with a new company that doesn’t really offer the services it claims, then customers will be left with the hassle of trying to establish service with another company, leading to frustration and expense.
Overall, the advantages of electricity deregulation far outweigh the disadvantages. As long as the competing companies are held to a high standard for the benefit of all, electricity deregulation offers consumers an abundance of positive choices that should be beneficial for everyone.
