Electricity Deregulation in Pennsylvania
Pennsylvania is one of a growing list of states that chose to deregulate its electricity market. Currently there are 19 states that have deregulated their electricity market in the U.S. What is deregulation and what does it mean for consumers?
Deregulation is the introduction of competition into the generation of electricity. Historically, one company controlled and operated all aspects of regional electricity service. These companies, utilities, are monopolies that are highly regulated by state and federal governments. Traditionally, utilities were the only company that could provide both the generation (the creation) and distribution (the delivery) of electricity in their respective territories. In Southeastern Pennsylvania, the electric utility is the Philadelphia Energy Company (PECO).
In 1996, the PA General Assembly passed the Electricity Generation Customer Choice and Competition Act. This law deregulated Pennsylvania’s electricity market by allowing other companies besides PECO to provide electricity generation service. Electric distribution was left to the utilities due to the difficulties presented by multiple companies owning and operating various power lines. The purpose of introducing competition was to provide consumers with more options, which would lead to lower prices and innovative product offerings.
As a result of deregulation, today there are dozens of companies providing a multitude of electricity generation options and saving consumers money on their electric bills. For The Energy Co-op and its members, deregulation provided an unprecedented opportunity to empower consumers to support renewable energy. Since 2008, The Co-op and our members have helped avoid 83,883,600 pounds of carbon emissions with our EcoChoice electricity service. That is the equivalent of taking 9,451 cars off the road for a year or planting almost 1.25 million trees!