Energy Basics

There are two main types of energy that get used the most, electricity and natural gas. These energy sources are typically subject to market fluctuations based on supply and demand. 

Electricity, unlike other commodities, can’t be easily stored. Traditional electric bills will measure your consumption using per kilowatt hour (kWh). The rate of consumption will fluctuate, meaning your bill will too.

Natural gas is transported using an infrastructure of pipelines that takes the gas from drilling sites and delivers it to your location. It’s traditionally measured on utility bills per dekatherm (DTh).

How Does Energy Pricing Work?

There are two main factors that drive the cost of a typical energy bill:

• Season: Energy prices tend to be higher in the summer and winter, as more heating /cooling is needed.

• Consumption: Most energy bills will charge you based on the amount of kWh you use. As that rate goes up, so does the total cost on your bill.

Your utility company had two roles in bringing energy to your location:

• Supplying the Energy: Physically having the quantities of the energy sources.

• Distributing the Energy: Routing the energy to your home to power your lights, televisions, stoves, and more.

Your utility company bills you for supplying and distributing your energy, along with any applicable taxes.

What is Deregulation?

This is where we come in. 

With deregulation, your energy supplier and distributor can now be two separate entities. Giving you the power of choice, MG4SMB has partnered with Astral Energy, which takes over the role of supplying the energy. Your local utility company will still have the role of distributing your energy.

After Deregulation

Your bill will continue to come from your utility company and will look almost exactly the same with two exceptions:

• A line item that now says that Astral Energy is your supplier of electricity or natural gas.

• Your overall bill will change based on your personalized fixed price.

History of Energy Deregulation in the United States

in 1986, the North American Electric Reliability Council (NERC) was founded to split the U.S. into ten energy regions. Although NERC was effective at improving the reliability of energy delivery, it also allowed for local energy monopolies to pop up. These monopolies would often overcharge energy users who had to foot the cost of any expansion projects initiated by these companies.

Therefore, in 1977, the Federal Energy Regulatory Commission (FERC) was created, and along with the Energy Policy Act of 1992, FERC made a move to deregulate the energy industry and let individual states decide how energy was supplied to users. As a result, competition was once again introduced to the energy industry, and deregulation began across states.

How Deregulated Energy Works

Businesses and consumers in New York, New Jersey, Massachusetts, Pennsylvania, Ohio and Maryland now have deregulated energy. This option gave energy users the choice of who provides their energy, while utility companies still own the delivery infrastructure. 

An energy supplier will purchase energy from the utility companies and then sell their energy supply to consumers. Consumers will still receive their energy from the utility companies’ infrastructure. This process gives consumers more control over the rate they pay for energy while still receiving the same service quality.

Benefits of Deregulated Energy

Energy deregulation offers a variety of benefits to both companies and consumers:

• Energy Savings – The ability for energy users to choose an energy supplier and plan that suits their needs or budget.

• Corporate Competition – Working with multiple electricity and gas suppliers allows us to offer optimal rates and services.

• Energy Consciousness – Customers are encouraged to understand different energy costs by investigating different companies and their plans.

• Energy Efficiency – Energy practices are increasingly important to consumers, so this motivates companies to be more energy efficient.

At Astral Energy, you will receive all the energy you can use at a flat monthly fee that won’t change throughout the year. Request a quote to find out your price today!