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What Is Deregulation and How Can You Benefit From It?

To put it simply, deregulation is the reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.

To put it simply, deregulation is the reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.

An example of deregulation is the telecommunications industry. Before deregulation, the government had control over telecommunications, which meant people were not able to choose their phone provider and there was the only one available to them. It was not until the 1980s, when the industry became deregulated, that consumers were given more choices and offered competitive prices.

Deregulation of the telecommunication industry led to tremendous leaps in technology, and a greater push for innovation. In fact, the mobile phones we have come to rely on were possible because of deregulation. If the telecommunications industry had not been deregulated, it is very possible that customers would still be tied to a phone cord today.

The same idea can be applied to the energy industry. Energy deregulation in particular involves the restructuring of the existing energy market and mainly seeks to prevent energy monopolies. In the states that deregulate energy, business and residents can choose who supplies their natural gas and/or electricity – and those businesses are not limited to working with your utility.

The utility still delivers the energy through its pipes and wires. However, a utility is strictly focused on delivering the energy itself. Suppliers, on the other hand, purchase natural gas and electricity directly from producers, and, unlike your utility, can offer more than just energy. They are able to offer more options which allow customers to take advantage of a variety of products and services that are customized to different businesses, and can potentially save customers money and decrease their energy consumption.

Energy brokers provide additional value to customers. People often think they benefit when buying directly from a supplier by “cutting out the middle man”, however, a direct supplier is only a single source option, whereas brokers are often able to source from multiple suppliers to accommodate a business strategy. Brokers work for their clients and as a “buyer’s agent” and consultant – they do not sell energy or favor any particular supplier. They do the work by shopping around in order to find the best price and a better way to manage a company’s energy spend over time.

Although their focus on custom care can differ widely, the emphasis on quality service, continued innovation, and diverse products are usually what gives brokers staying power.

They rely heavily on lasting relationships built on trust, and additional products and services that complement natural gas or electric service are also can set a broker apart.

When making the decision between brokers and suppliers, it is recommended that you choose a broker that is transparent and is able to offer flexibility. Many brokers can offer products and services that can be completely customized to fit your business needs. It just takes a little research to find the right fit.


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