Effects of Deregulation on The Electric Market

Effects of Deregulation on The Electric Market

Deregulation began in the 1990’s. At first vehemently opposed by the electric companies, it took a considerable amount of time before deregulation spread to the other areas of the country. Currently over 30 states have deregulation laws. Deregulation is good as it transfers the power back in the hands of the consumers, something that the service providers didn’t want. It shook up the then electric market as the service providers were forced to lower their fees in order to remain in the competition. Also the monopoly of a single service provider ended and subscribers could select a supplier based on their personal inclinations and requirements.


Deregulation also paved the way for a large number of service providers to set up their businesses. Now there had to be a regulation system in place to control the service providers.Generally the area which are deregulated have a public utilities comission to watch over the companies. Any subscribers who is troubled by his supplier can go and complain to the comission to have his issues resolved.

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Prepaid electricity service was first introduced in Texas in 2011. Since then, consumers have had more choices when it comes to selecting their electricity service provider, as well as in choosing their rates and plans. In the Dallas area, for example, there are more than 350 plans being offered by Retail Electric Providers (REPs), with 27 of them prepaid plans.