HoHoww Deregulation

How Deregulation Helped You as an Energy Consumer

 

This is direct from BGE's site (my former supplier and provider), their explanation that NOTHING changes for the consumer who chooses an alternative supplier (diagram no longer available; substitute graphic found to aid understanding.  Note the words Provider, which means Supply on your bill, & Delivery, which means the company that owns the infrastructure of wires,  trucks, equipment and grid to your home.  They also are the administrators (& remain biller of services, emergency call center and information service.):

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http://www.bge.com/myaccount/choosingsupplier/energysupplyoptions/pages/default.aspx

 

Note:  Supplier B in the diagram below could be Ambit.  Ambit's partner (the generator) and Ambit (the retailer) team up to send it through the existing grid to a BGE substation.  If a consumer chooses supplier B (Ambit), BGE delivers it at the cost the consumer and supplier (Ambit, Constellation, Dominion, Stream, etc.) have agreed upon.  BGE gets paid for use of their infrastructure on our bills. 

The monopoly of Generator-Deliverer-Retailer has been broken by deregulation law.  The incumbent company is now only allowed to do one of the three.  Since they have the infrastructure in place,  they keep the delivery and are paid for that on our bills.  What Ambit reduces is the consumer's cost for the supply.  Ambit buys it at a futures price, which is hedged and cost-projected; BGE is not allowed to speculate and has to charge a higher price to keep from operating (by law) in a deficit.  They make little to no money on supply and do not care if you choose another supplier.  They have to buy it for you and charge you since they are not giving it away.  That is why Ambit can compete, offer consumers a competitive if not lower price, and still make a profit.

 

Ambit has set up their own proprietary BlueNet™ IT system, which delivers comprehensive account management and unmatched billing, usage and service access.   CIO John Burke's expertise and background has given Ambit a leg up on the competition.  Other companies in various industries have offered to pay handsomely for the BlueNet™ system, but only Ambit has it.  See John's bio  http://ww2.ambitenergy.com/about-ambit-energy/ambits-leaders

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Below here is from BGE's site at
        http://www.bge.com/myaccount/choosingsupplier/energysupplyoptions/pages/default.aspx

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Why You Have Choice 

In the past, utilities such as BGE were responsible for supplying and delivering customers’ natural gas and/or electricity. This meant that you could buy natural gas and electricity supply only from your local utility at the price authorized by the state’s Public Service Commission (PSC). Today, you can choose to purchase your gas and/or electricity from any energy supplier that is licensed by the Maryland PSC and registered with BGE.

 

BGE’s Role
Even when you choose other energy suppliers, BGE will deliver your gas and electricity, maintain pipes and wires, restore power after an outage and provide emergency service. If you decide to stay with or return to BGE’s gas and/or electricity supply, you will be charged the same rate that the PSC has authorized for all customers in your rate class who are purchasing supply from BGE. 

 

Standard Offer Service
BGE purchases electricity for customers who do not choose an alternative electricity supplier. Customers are charged for electricity – called Standard Offer Service (SOS).

 

Supply and Delivery Electricity

• Supply is the electricity itself, which is generated in power plants and transmitted across high-voltage lines to substations.  Delivery, also called distribution, is the process of delivering electricity to you along a network of power lines – the local distribution system.  Electricity deregulation only affects the supply part of the business, giving you a choice of the company that supplies your power.

 

Natural Gas

• Supply is the natural gas itself, which is produced at a well, refined and transported through transmission pipelines to local distribution points.  Delivery, also called distribution, is the process of delivering gas to you through local distribution pipelines.  Natural gas deregulation only affects the supply part of the business, giving you a choice of the company that supplies your gas.