RSSElectric Deregulation In New York Is A Win For Businesses
Nov 23
New York deregulation, Electricity, energy, New York No Comments
Right now, many businesses are making their exit from the State of New York because of the rising energy prices. By deregulating electricity, businesses will have a reason to stay, as well as aid in the growth of the economy.
In the beginning the power companies were provided a territory upon which they were permitted to lay their grids and provide power to customers. Such territories were state regulated, and the federal government had very little say. Such companies were held responsible for the provision of hookups, power generation, and maintenance, though as you’ve seen, the maintenance thing doesn’t always work out.
Much of the generation of electrical power was done either using local hydropower resources (such as that in the Niagara Falls area), by the burning of fossil fuels like coal, or through the use of a nuclear plane (like the Ginnea plant in the Rochester area). The downside to this process was that the costs to generate electricity to customers could vary significantly from area to area, so the customer was more or less held captive by the prices charged by their local utility. For the most part, consumers had no other choice than to hook up and pay these rates or do without.
The Public Service Commission was generally left holding the bag on this one, and the public was not happy with their rulings. It was widely believed that the ruling council sided with the utility companies, and essentially agreed with the raise in price. These costs eventually drove businesses out of the state in the hopes that they would find cheap energy prices. You really can’t blame them; it’s hard to keep your doors open when you’re paying more for the power than you’re bringing in monthly.
Now deregulation moves in New York State have provided new opportunities for businesses all over the state, as customers are not limited to a single power company in that territory. Businesses can go to different power companies and even find a lower price if they want. This will cut costs, and they can even use an out of state supplier if they deem it necessary.
It should be noted here that a consumer’s electricity bill is divided into two parts: one for the maintenance of the wires and connections to the business or home, and the other for the delivery and actual cost per kilowatt hour. While the charges for the delivery might reflect a savings due to lower charges from a given supplier, the maintenance charge will always be set by the local utility that “owns” the delivery wires and will remain the same, no matter who the power supplier is.
With deregulation in place, the individual business is now free to shop for a supplier of electricity based on rates that are more competitive, no matter where that supplier may be located. Marketplace competition provides the healthy incentive for power utilities to adopt more cost effective ways to generate energy as well as to bring pricing under better control to successfully compete for the consumer’s energy dollar. In addition, since the location of power suppliers can now cross state lines, consumers are afforded more stringent protection since Federal regulation and guidelines over the industry may be invoked.
Author: Jerry Dyess has been in the Commercial Energy business Texas Electric news for many years.
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