Pennsylvania’s deregulated market is a win-win for everyone involved because it produces competitive, low utility rates for residents, removes generation costs for utility companies, and stimulates the state’s business and financial growth.
At UGI Energy Services (UGIES), we bring affordable energy to more than 42,000 customer locations across the Mid-Atlantic and Northeastern United States, including Pennsylvania. In a deregulated market, things are bound to change, but we’re well-positioned to continue meeting our customers’ energy demands for years to come.
What Is Energy Deregulation?
Energy deregulation restructures a regulated electricity and/or natural gas market by replacing the local utility monopolies with competitive private suppliers. Deregulation allows consumers to choose a retail energy provider to supply their electricity and/or natural gas.
Your local utility will still deliver the energy supply through existing infrastructure, but they are prohibited from generation and transmission ownership. Instead, their full responsibilities include distribution, operations, maintenance from the point of grid interconnection to the meter, and billing ratepayers.
Energy Deregulation in Pennsylvania
In Pennsylvania, the electricity and gas markets are deregulated, meaning people are free to select a provider of their choice for either. While this might seem like a simple right for residents, only a handful of states are fully deregulated, including:
- Illinois
- New York
- Ohio
- Pennsylvania
- Michigan
Energy deregulation in Pennsylvania was a result of the Electricity Generation Customer Choice and Competition Act (EGCCCA), passed in 1996. After the electricity market was successfully deregulated, the Natural Gas Choice and Competition Act (NGCCA) was passed in 1999, deregulating natural gas providers as well.
How the Market Works
When you better understand how a deregulated energy market works, you can lower monthly utility bills and avoid hidden fees. To start, deregulated markets operate in three parts, separating generation, transmission, and distribution.
- Generation: Refers to energy production, whether from coal plants, natural gas facilities, nuclear reactors, or renewable energy installations.
- Transmission: Refers to the infrastructure components like high-voltage power lines that carry electricity over long distances, allowing energy to move efficiently across regions.
- Distribution: Refers to the local power lines, transformers, and equipment that deliver to individual homes and businesses.
Knowing how the system is organized is a good first step; understanding who is involved and what they do can also help you as a consumer navigate the market effectively. Roles include:
- The local utility company: Your local utility company owns and maintains the physical infrastructure that delivers energy to your home or business. They ensure reliable service delivery, proper response to power outages or gas leaks, and maintenance of the grid’s integrity. Even in a deregulated market, they can still oversee the overall billing process, even if you have a different energy supplier.
- Energy suppliers: These are the new additions in a deregulated market. Depending on the state, energy suppliers may refer to retail electric providers or natural gas suppliers. The supplier either purchases energy from generators or produces it themselves, then resells it to consumers at a rate they set. This is where you have choice, so suppliers compete intensely for your business by offering various energy plans, pricing structures, incentives, and customer service.
- Energy generators: These are the power plants or natural gas fields producing the energy sold to the wholesale power market.
- Transmission and grid operators: These independent organizations operate exclusively in the electricity sector, controlling, monitoring, and managing the electrical grid, including the high-voltage transmission lines and competitive wholesale market.
Choosing a Provider
Energy deregulation in Pennsylvania means you can choose your provider. To choose, you can use the official PAPowerSwitch platform managed by the Pennsylvania Public Utility Commission (PA PUC), or opt for alternative ways:
- Via third-party energy marketplaces.
- Directly with a supplier.
- Via phone or mail enrollment.
- By contacting the PA PUC directly.
While exploring your options, there are some things to pay attention to and steps to take to find your best match.
- See what’s out there. Get an idea of the companies that service your area.
- Look at rates and plans. Check the price per unit of electricity/gas, fixed vs. variable rates, and special introductory rates that will increase later.
- Find hidden costs. Watch for monthly service charges, sign-up fees, cancellation fees, and minimum usage rules.
- Know how to switch. Once you’ve chosen a new company and signed up for a plan, they'll handle the paperwork, notify your local utility, and keep delivering energy as normal.
Choosing an energy provider can be stressful when you don’t know what to look for, but by following the steps above, you’ll be on your way to finding the best plan for you and your family or business.
Energy Deregulation With UGIES
UGIES participates in Energy Choice, a government-mandated utility program in place for over 20 years. It provides commercial and residential customers the opportunity to shop around for energy programs and rates.
Energy Choice was created to level the playing field and keep the customer’s best interests in mind. Our involvement is one of the ways we provide our customers with honest, reliable, and transparent service. Learn more about what we bring to the table and contact our team today!
