Deregulation 101

Deregulation 101

Deregulation 101 2000 667 Olympus Energy

 

Albertans pay some of the lowest energy prices for their homes and businesses in North America. Why? Deregulation… that’s why.

Deregulation is among the most confusing topics to take on. It’s like trying to understand chemistry or the tax system. There’s a lot to it. I’ll try to keep it as simple as possible.

Deregulation is choice. More technically, it is when the government backs off from limiting the number of companies or setting mandatory prices in the utility industry. This means we have more open access to the natural gas and/or electricity market and lower prices generally because more companies are able to compete for our business. When this happens, more companies can compete for our business which tends to lower the cost to us Albertans. We have a choice. Deregulation can be empowering – pun intended.

Alberta has the most deregulated energy market in Canada. Our open market lowers our utility prices. Why would the government move to deregulate their natural gas and electricity markets? A healthier economy and happier voters. The healthy economy comes from more businesses in operation which provide more jobs and more companies and employees paying taxes to the government.  It’s a real win-win for all of us. There are still laws in place to ensure fair business and limits on production. Alberta is a leader in energy prices because they championed deregulation.

Alberta deregulation opened up the ‘spot market’ for both natural gas and electricity. These spot markets allow the utility companies to buy energy commodities in real-time instead of buying once every month or once a year. This real-time access reflects lower prices on our floating rate utility bills. A good analogy for the spot market is being able to decide what clothes to wear by looking outside and checking the current forecast. If we didn’t have the spot market, it would be like deciding what to wear 45 days from now, using long-range forecasts. You would need to carry extra clothing with you just in case the weather changed. The spot market trims out bulky forecast prices because there is no need to carry around the extra prices. Without the spot market, energy providers must account for unforeseen circumstances and buy the energy at a higher price just in case there are major fluctuations. The increased risk of a regulated energy market pushes the prices higher in general to consumers. The spot market is a real-time market with no unnecessary guesswork. We are always getting the lowest possible rates on our utilities with this deregulated system.

Still, think you are paying too much on your utility bill? Call Olympus Energy to beat your current rate. If we can’t give you savings, we’ll give you $100 cash.

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