“People are often surprised to learn that they have a choice when it comes to energy supply. Retail energy makes that possible. And in my view, having the ability to choose is far more powerful than no choice at all.”
Executive Vice President of Procurement, Pricing and Product Engineering, Crius Energy
As soon as people find out what I do for a living, I’m
always asked two questions:
1.) What the heck is retail energy?
2.) So tell me, should I stay with the utility or
choose a third-party energy supplier?
Since I have long been part of an industry that at its core
is based on choice – I always respond in exactly the same way: Let me tell you
what I know to be true and then you
As recently as the 1980s, consumers didn’t have a choice
when it came to energy. Utilities had a monopoly and everyone paid their
portion of whatever government-guaranteed profit was doled out to each utility based
upon a complicated and dated rate structure. If you were a consumer back then,
you secretly hoped that your utility
was well-equipped to manage unexpected price shocks like the 1970s oil
embargoes so that you could enjoy consistent and predictable energy rates.
Then, beginning in the 1990s, the federal government acted
to inject some competition into the market. At the same time, many states acted
to end monopoly protections for retail sales of electricity and natural gas.
Gradually, large competitive wholesale power markets overseen by large regional
grid operators emerged. Taken together, this meant that for the first time,
consumers in a growing number of states could make their own choice when it
came to energy, choosing a retail electric or natural gas supplier just as they
did a cable television or cell phone service provider.
Today, roughly one
third of all U.S. states have energy choice. In these states, often called
deregulated energy markets, energy customers still receive one bill but with
two main components: a transportation and distribution charge, and a charge for
the energy itself (which is typically the largest contributor to the ultimate
price customers pay). The utility remains responsible for the poles, pipes and
wires that deliver the energy (the transportation and distribution costs). But
the supply portion – the electric energy or natural gas – is subject to
competition and can be provided by a retail energy supplier.
Retail energy suppliers do not work for, nor are we endorsed
by, utilities. But we do work with the utility companies to ensure that
consumers can easily switch their energy supply with proper authorization. And
while residents in some energy choice states have been slow to exercise their
power to choose, around one-quarter of all consumers in deregulated energy
markets today are opting to get their supply from third-party providers. Why?
With 2015 the
warmest year on record (and
January 2016 the warmest month on record), more and more consumers are
doing what they can to limit their carbon footprint by making a more
responsible energy choice. Viridian customers for example, have chosen to be
part of a powerful collective impact that has amounted to 7 billion pounds
of harmful CO2 emissions avoided since 2009.
At the same time, other consumers select third-party
suppliers based on price, contract term or the perks and rewards that come with
service from a particular retailer. For example, Energy Rewards promises powerful
entertainment rewards like free premium entertainment channels, movie
tickets and even gift cards.
Although specific deals and offers will differ by provider,
retail energy markets in general allow consumers to choose among competitive suppliers
vying for their business. This provides consumers with a range of options in
terms of energy management, efficiency, renewable “green” energy and price.
And as veteran of this industry for more than a dozen years,
I believe that the consumer ultimately wins when suppliers are forced to
compete for their business. I also have seen first-hand how deregulated energy
markets spur innovation and improvement in ways that a traditional utility
monopoly approach simply cannot.
Still, people are often surprised to learn that
they have a choice when it comes to energy supply. Retail energy makes that
possible. And in my view, having the ability to choose is far more powerful
than no choice at all.
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