In regulated areas, utility companies are responsible for all steps in the energy process – from generation to sales and delivering energy to the consumer. This means that public utilities commissions oversee all of these aspects as well and set rules for the rates utility companies can charge their customers for energy service.
- Regulated system. In this energy system, utility companies both sell and delivery energy – and are the only companies who do so.
- Regulated PUC. This is the governing authority that oversees and regulates the rates your utility company can charge for energy service, including supply and delivery fees.
In deregulated areas, utility companies are no longer solely responsible for selling energy to consumers. Consumers in deregulated areas can also purchase energy from retail electric providers (also called REPs, suppliers, and ESCOs). In some areas, consumers are required to purchase from an REP. In other areas, consumers can choose to stay with their utility company or choose an REP. To learn which type of system your city has, find your state here.
- Deregulated system. There are two types of deregulated systems. In one system, the utility company still sells energy, but faces competition from retail electric providers (REPs). In the second system, the utility company no longer sells energy and consumers must choose an REP. In both systems, the utility company still delivers the energy to consumers.
The role of PUCs changes in deregulated areas, too. The point of a deregulated system is that market competition keeps energy rates in check, so there is no need for PUC oversight. However, utility companies remain responsible for delivering energy to consumers, whether you choose an REP or not. You’ve probably seen the delivery charges listed on your bill as UDC, TDU, or TDSP charges. Public utilities commissions in deregulated states set this delivery fee so it remains constant between all utility companies. Some PUCs also manage consumer complaints, depending on your state.
- Deregulated PUC. Supply rates are now regulated by market competition, so the PUC only oversees delivery rates. Some PUCs also handle consumer complaints against utilities and REPs.