New York Electricity Deregulation

New York was one of the first states to deregulate the electricity and gas market. Many people wonder why deregulation was decided upon; what are the benefits? How have services improved for New Yorkers? Let's take a look at the history.

The History Of New York Energy Deregulation

On November 9th, 1965, the northeastern US and part of Ontario, Canada suffered a massive black-out. The electricity grid was blamed for this, with people claiming that it couldn't cope with the demand put upon it by residents. Improvements were made to the grid infrastructure so that it wouldn't experience similar problems in future. However, prices of electricity in New York were still some of the highest in the country by the time the 1990s were reached. There was one level of service and one price for all New York electricity rates, which many found frustrating. Originally, energy was supplied by monopolies that owned power plants. The state heavily regulated these services.

The public demand for deregulation began to grow, and as a result the New York Public Service Commission (PSC) passed Competitive Opportunities Case legislation in 1996. This was designed to open up residential energy markets to competition. The goal of The New York state legislation was to achieve a competitive wholesale market by 1997. Then, achieve a competitive retail market by 1998. In order to accommodate these changes, all utility companies had to restructure and conform to the new legislation. The monopolies at state level were broken, and many of the plants were sold on to a third parties. Each utility in New York still offers a ‘benchmark' service as a default, for those who have never shopped for an alternate energy provider. Each utility company set their prices differently, depending on where they are in relation to competition.

How Does Deregulation Work?

The majority of New York utility companies give customers the choice to select an alternative Energy Service Company (ESG). There are more savings and energy green options available with over 200 alternative choices for customers. All companies compete to please customers more and more since the rules have been rewritten. Although the utility companies are still in charge of distributing the power, the consumer is in direct contact with their Energy Service Company. They will also respond to outages and service interruptions. 24% of New Yorkers have made the switch to an alternative Energy Service Company. There's also the option to choose an alternative gas company, but this has taken off much slower than the energy option. Only 16% of New Yorkers have chosen an alternative gas company. The numbers are still rising, though, as people are continuing to make the switch.

A black-out in 2003 made New York's grid the topic of discussion again. People were certain that the state needed to make its energy services more modern with even more improvements. In 2014, there were reforms all over with ‘Reforming the Energy Vision'. Now, New Yorkers enjoy a more modern infrastructure that can cope with demand. Energy deregulation in New York can be considered one of the most successful in the states.