About energy deregulation

 

Under deregulation, suppliers purchase electricity or natural gas at wholesale and may be able to sell it at a lower price. The consumer continues to have delivery provided by their current local utility. 

Benefits to the consumer:

  • Price protection (with a wider variety of pricing options)

  • Competitive prices may now be available to the consumer

  • More product plans are available for customers

  • Prices may be stabilized for the consumer

  • Larger selection of products that support customer needs

  • Freedom of choice

RTO determines capacity

Regional Transmission Organizations (RTO) are responsible for maintaining adequate capacity between utility companies

  • The RTO serving the Northeaster United States is PJM Interconnection, L.L.C. (servicing all or parts of 13 states plus District of Columbia)

 

PJM uses a Reliability Price Model (RPM) - Determines Capacity

  • Auction process gains commitments from resources 

  • Sets price for capacity

  • Sends price signal to potential developers of generation, demand response and/or transmission.

Capacity represents the need for adequate generating resources

  • Capacity ensures there is enough electric supply to meet peak demand at all times.

components of your electricity price

Bypassable Generation and Transmission Related Elements 

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