To create competition in the energy industry, states began, one-by-one, to decide whether or not deregulation of electric utilities was best for business. Proponents of energy deregulation argue that deregulation creates healthy competition and gives consumers a choice in power companies. Opponents say that deregulation of the electricity generation industry is futile because not only is it too complex to rearrange the way power is sold, but also many customers won't switch companies unless they would see a drastic drop in price. That is what deregulation was expected to do when the trend began in the late 1990s.

Some states had caps in place on retail energy prices which held further price increases at bay, but some states have recently lifted caps which have increased some states' rates as much as 15%. If you're looking to benefit from deregulation of electric utilities and get into the energy industry, consider the following:

1. How you benefit from electric utilities deregulation

2. How you can keep up with the competition

3. How you can encourage deregulated energy providers to go green and have your company reap the benefits

Action Steps
The best contacts and resources to help you get it done

Find out if energy deregulation affects your state

Electric utilities deregulation has not happened in every state. To find out if there is healthy competition in your area, use local directories for a list of companies providing service in your zip code. Some directories even let you click and compare rates. State electricity deregulation is said to have driven up costs considerably in some states, especially when fuel prices increase, so you'll also want to find the latest average retail price in your area to see if you can compete.

I recommend: Enter your address with White Fence and get a list of competitors. For a list of states with electricity deregulation, consult Texas Electricity. For the most recent energy rate statistics, go to the Energy Information Administration website.

Let power deregulation experts help you cut costs

If you already operate in the utility industry and need help with rising energy costs, contact consultants who are familiar with businesses that are benefiting from energy deregulation. These companies can help both private companies and local municipalities in states where energy has not been deregulated.

I recommend: Independent Energy Consultants, with more than 25 years of experience, provides consultation and risk management to both municipalities and private energy companies. Get profiles and compare services with Global Source's state-by-state list of consulting services.

Use deregulated electricity sources with a focus on renewable transmission investment

Deregulation in electricity simply means more choices for consumers at the power-delivery level. The electricity a customer buys actually comes from the default electric service provider, or their state's old monopoly. That company then maintains power lines and responds to disruptions in service, and it also generates the power. Encourage the development of alternative energy sources by getting involved in your state's transmission investment plan to improve energy delivery infrastructure. Reap the business benefits of electric utility deregulation if your company is currently involved in any energy infrastructure improvements. Put your company's muscle into wind energy transmission facilities, and support the government's plan to generate 20% of the nation's power from wind energy by 2030.

I recommend: Attend an American Wind Energy Association workshop to learn more about transmission investment in the context of energy deregulation. Visit the federal Energy Efficiency and Renewable Energy listing of States with Renewable Portfolio Standards to see what renewable sources the old electric monopoly in your state is employing in the face of utility deregulation and lost profits.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you're thinking of getting into the energy industry, consider offering a fixed-rate contract to your customers. Deregulated electricity can often drive up the costs of energy through competition, and a fixed-rate option would guarantee rates over a fixed period of time in areas with unpredictable rate trends.