Electric markets typically either allow customer choice — or they do not. And what is available to you is generally dependent on where you live and/or operate your business in.
Regulated electric markets are home to vertically-integrated utilities that own or control the power plants that generate electricity, as well as all of the transmission and distribution equipment—such as the poles, wires, and transformers—that is used to distribute electricity to homes and businesses. In other words, you only have one option for your electric utility, who owns both the energy generated and the means to distribute it, and the rates your utility charges you are approved and regulated.
On the other hand, in a deregulated electric market, utilities are required to divest their ownership in generation and transmission. This means they are only responsible for:
What this ultimately means is that in a deregulated market, you have a choice of who to buy your energy supply from and how. You pay these certified Retail Electric Providers (REPs) what's often referred to as the "supply" portion of an electric bill.
The biggest difference when purchasing between these two supplier models comes from their structure. The overall structure of a provider ultimately affects the following three key components: Supply Price, Contract Flexibility, and Focus.
The supply price is affected in that any offered rate must take into consideration that provider’s overall costs to operate. For an Option 1 supplier model these costs are significantly higher due to size and overall load volatility of their customers currently being served.
Contract flexibility within the Option 1 supplier model is extremely limited and contract customization is nearly non-existent. This is because contracts are often skewed to favor the provider from the risks they face serving the masses. Option 2 providers, however, are licensed to serve specific customers; therefore, contract customization and flexibility are an integral part of the setup and negotiation process. This relationship is intended to be reciprocal in nature.
Because of the nature of the Option 2 certification, client focus is key. This chosen supplier model is the only one that affords the supplier the tools necessary to tailor their operations in such a way to benefit the types of customers they wish to serve. As a result, Pumpjack Power can provide significantly lower supply prices, customized contracts, and individualized focus.
When compared to purchasing direct from an Option 1 provider, broker/aggregator services undeniably provide cost saving benefits. This is because unlike shopping from a single source, brokers/aggregators afford their clients the ability to attain a broader market view of supplier offers when considering price, contract, and overall services. However, when comparing to Pumpjack Power the reality is that many brokerage firms are limited by those very same partnerships and the constraints that come along with them. As a result, when Oil & Gas consumers use a broker/aggregator they often:
Whereas, through Pumpjack Power: