What Is Energy Competition & Why Does It Matter?

November 13th, 2017

More than two decades ago, California became the first state to deregulate its electricity market, leading to the first instance of energy competition in the country. Since then, 22 other states, plus Washington, DC, have followed suit, including Pennsylvania and most other Mid-Atlantic states.

But this might leave you wondering—is energy competition a good thing? Why does it matter? How does it affect you? Keep reading to find out!

What Is Energy Competition?

In markets where there is no energy competition, electricity and natural gas services are controlled by the local government and utility companies. Many places have only one energy provider to choose from, so everyone in the city or region gets their power from the same company. This is a monopoly because residents and business owners are forced to pay whatever price the lone utility company charges, or go without electricity and natural gas.

With energy competition, things are different. Multiple companies operate in the same cities and regions, giving consumers a choice of where to buy their power from. More options mean more power for home and business owners.

Benefits of Energy Competition

According to basic economics, it’s better to have competition than a monopoly. Here are some of the benefits of living in a state where energy competition exists:

  • Lower rates: Competition is the key to lower prices. When consumers have a choice between two products of equal quality, they will almost always opt for the cheaper one. This means energy suppliers in deregulated markets are always trying to offer lower rates to appeal to customers.
  • New efficiencies and innovations: The more efficient an energy supplier is, the lower rates they can charge and the more customers they can attract. This fact has brought about many improvements that don’t exist in regulated markets.
  • Flexible price plans: Utility rates are infamous for changing without warning. More often than not, rates increase over time. In a market with energy competition, you have the option to lock in your rates, so you can predict what your bills will be from month to month. You can also choose index pricing, where potentially lower market prices may decrease your rates. Deregulation is all about options and flexibility.
  • Reliable service, no matter what provider you choose: Deregulated energy is often compared to the mobile phone industry, where consumers can choose different plans from different carriers. However, quality varies because each carrier uses different cell towers. This isn’t the case when energy suppliers compete. Because they all use the same infrastructure, you can expect quality, reliable electricity or natural gas from whatever provider you choose. This makes the cost your most important consideration.

How to Take Advantage of Energy Competition in Pennsylvania

Do you live in a deregulated market? If so, now’s the time to start shopping for a more affordable provider! The easiest way to compare prices and switch companies is to work with UGI EnergyLink. We make it easy to pinpoint the right energy supplier for your home in Pennsylvania or business across the eastern U.S. Then, we’ll help you lock in the lowest rate on day one. We have 130 years of experience providing the following services:

If you’re ready to take advantage of energy competition in our deregulated market, we will ensure a smooth transition when you switch providers. You’ll enjoy a lower rate without interruptions to your energy services or any decrease in quality or reliability. There’s no reason not to start saving today!

Enroll online or contact us by calling 800-797-0712 to start taking advantage of the energy competition in Pennsylvania’s deregulated market!