Energy Deregulation – Is it a scam or an opportunity to save money?

Energy deregulation is here.  Energy companies may now buy and sell energy like a commodity, to be delivered to consumers by the same public utility company as in the past.  One bill, paid to the same public utility company as in the past, but componentized to segregate the supply from the delivery portions of the bill.  Each consumer has the ability to choose a new supplier, and there are many suppliers.  Some with fixed rates, extended contracts and penalties for early termination, some with variable rates and month-to-month contracts and no penalty for early termination.  Most will offer promotional rates for one or two months, followed by an increase in rate, so consumers have many factors to consider when selecting the company they wish to supply their energy.  The changing of rates after a promotional period or the assessment of a penalty for early termination of a fixed-rate fixed-period contract are not scams, but are definitely factors to consider when making the decision to change providers.  If the future could be predicted, it would be much easier to make a decision regarding one product or another or the concept of fixed rate and time vs. variable rate considerations.    In the end, most pricing will be fairly comparable.  Some companies have sought other ways of differentiating themselves by providing greener energy for comparable costs and others have associated themselves with charities in order to win the allegiance of consumers.  One company has done both and also returns some of its profits in referral fees to its customers, thus driving down an otherwise comparable price to a price below that offered by any of its competitors to those customers who make such referrals.  Referring customers can benefit in their rates indefinitely, providing them a worry-free no-investment no-risk alternative to the high cost of energy today.   The key for each consumer is to know what makes the most sense given the personal preferences of that consumer.  One consumer may want the peace of mind of a long-term rate commitment, another may wish to contribute to a healthier environment, while a third may wish to benefit a particular charity with the same basic energy choice.  There is no right answer.  Understanding all available options before choosing a supplier is always the key.


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