Electric Deregulation In New York Is A Win For Businesses

Article Written By: Jerry Dyess

Though it's not surprising, it is still unsettling to see the number of businesses that are simply leaving New York due to the massive rise in energy prices. The deregulation of electricity has definitely helped the state's economy and given businesses a reason to stick around.

When the power companies were first set up, each one was given a set territory where they could run lines and serve end customers. These territories were regulated by the State, and to a much lesser extent, by the Federal government. These power companies were responsible for providing hookups, generating the electricity, and maintenance of their power lines to their customers.

There are a number of ways that power can be generated, though it was normally done with hydropower, fossil fuel burning, or nuclear power. Power costs money however, and in the end it is the customers that suffer. To make it worse, the power in each area was different. It could be high, or it could be low, but no matter what the price was in another territory, they had to pay the price for the territory that they were residing in.

Recourse to address perceived or actual rate discrepancies was pretty much left in the hands of the Public Service Commission, but many consumers were unsatisfied with the rulings feeling that it sided mostly with the utility for the need for rate hikes and rates over the interests of the consumer, whether private or business. As a result of the prohibitive costs, many businesses began to leave the State looking for cheaper energy prices to help reduce operating costs.

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.

Now that deregulation is a reality, business's are free to use any company they want for power, and they can shop based on the rates provided. Not only that, the road is now clear for more competition in the power industry. Suppliers can provide power across the state lines, and federal guidelines have been invoked, meaning that customers will now have much more support and protection than they did when electricity was just a local service.

About the Author

Author: Jerry Dyess has been in the Texas Commercial Energy business for the past 7 years. He has published many articles on Business Electric rates.

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This Article Has Been Published on Tue, 24 Nov 2009 and Read 175 Times

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