Energy choice is becoming more common across the United States. Many states have adopted full energy choice or a variant allowing partial choice depending on the market. However, no matter how accepted or even ubiquitous energy choice is, there are still pervasive myths that harm the industry which can be tough to shake. Here are the top five myths about energy choice and the truth about each one.
Myth #1: The utility company that used to have the monopoly on energy is the best choice for energy
Truth: Everyone buys and sells energy in the same marketplace, so there’s no “advantage” or best supplier for energy beyond price and customer service.
So many companies and brokers buy and sell energy but they all participate in the same energy exchange, thus there is no appreciable difference between the original utility and any other provider. Any energy supplier can use the same power source as the utility and not suffer any difference to consumers. There are a variety of ways both utilities and brokers work to serve customers, including lower prices and better marketing. However, the actual energy product never differs no matter the name on the bill.
Myth #2: Leaving the utility company as a customer causes power or service to be unreliable & switching to a private provider leaves you without service
Truth: Your service and response to outages remains the same no matter who you buy energy from.
Some people believe that by leaving the utility company, you are on a lower priority list for response times after outages or when your service becomes spottier. However, nothing could be further from the truth. The utility company has to maintain all the service lines and ensure that the is no “discrimination” against consumers for not buying from them. Likewise, switching to a private energy provider does not leave you without service.
Myth #3: Government-owned or otherwise monopolistic energy companies are not interested in making a profit and are better for long-term energy production
Truth: Private entities are no worse for energy than government owned energy companies or energy companies that act as monopolies.
While some may argue that government-owned or monopolistic energy companies have less incentive to make a profit and thus will not cut corners, there is no proof to that argument. For example, some energy companies continue to make profits despite being a monopoly. Additionally, they may not demonstrate any extra effort in reinvesting those profits into clean energy. Private energy companies help create a more competitive marketplace so that customers can save money and utility companies can modernize and innovate.
Myth #4: You are obligated to pick the utility company as the only energy supplier where you live
Truth: In many states, there are a variety of options to get your energy that don’t require you to do business with your utility company.
The ever-growing movement which allows consumers to choose the supplier for all or part of their energy needs has opened up markets in many states to energy choice. Consumers can now choose who supplies their energy with the help of brokers, so they save the most money possible on their bill. Whether it be electricity or natural gas, brokers are helping revolutionize how energy is sold and marketed in order to help spur competition benefitting customers.
Myth #5: Private energy suppliers are unreliable and can lead to supply issues
Truth: Signing up with a private energy supplier is no different than staying with your utility company.
The utility company still has to provide you with power no matter the vehicle you choose, and private energy suppliers often provide a cheaper alternative for customers. Any utility company that takes retaliatory action may be subject to penalties under the law. That way, there is a very strong incentive for utility companies to continue to provide service to every consumer, no matter how they choose to get their energy.
While there may be some myths surrounding energy brokers and the competitive energy market, the truth is that it is just as safe as purchasing directly from the utility company. Add to that the fact that customers have the potential to save by buying competitively, and you have a winning way to get energy where everyone wins.
For many of us, the prospect of using energy is as simple as turning on a light switch. The way we grew up dealing with energy was direct: we contracted with a company which is often the only power producer and distributor in the state, and we pay the rates they set. It is one of the last government-controlled monopolies in the United States which impacts our day to day lives. Importantly, like some states, Florida is now taking steps towards energy deregulation, which would help increase consumer choice when buying power. Many may ask if you can choose which airline to fly, which vendor to purchase groceries from, and a litany of other consumer choices: why can’t you choose an energy company?
What does deregulation mean and what is its current status in Florida?
As of now, Florida Power and Light (FPL), is the only energy provider residents of the state are able to use. Unlike Florida, other states have allowed for power companies to come in to their state markets and charge competitive rates in order to provide the best deal possible to consumers. This also has the additional benefit of fostering competition in the market.
Across the country, many states have begun the process of deregulating. In some states, they have already implemented full deregulation. However, in other states, partial deregulation was achieved by allowing only the energy market or the gas market to be competitive. As deregulation is not yet legal in Florida, allowing for consumers to pick who they purchase power from is still seemingly a foreign concept, but one which will be decided in 2020.
Where is deregulation politically and legislatively?
Currently, supporters of a statewide ballot initiative are gathering signatures to help ensure it appears before Florida voters on their November 2020 general election ballot. They have until the February 1, 2020 deadline to gather and submit more than 766,000 valid signatures to meet the legal requirement for an amendment to the Florida constitution to be placed on the ballot.
In addition to these typical hurdles, deregulation has become a political flashpoint as the Florida Supreme Court has heard a challenge from Florida Attorney General on the ballot initiative’s language. She has argued that it is invalid under Florida’s single-subject rule, and that the language which will be placed on the ballot is misleading. Others such as FPL, Duke Energy, the Florida Public Service Commission, the Florida Association of Counties, the Florida League of Cities, and many others have concurred with this interpretation or filed amicus briefs, (also known as friend of the court briefs) supporting this position. The Florida Supreme Court has not indicated when it will rule on this challenge.
Florida voters seem more optimistic on whether or not to support energy deregulation as an initial poll in June by St Pete Polls demonstrated slightly more than 66% of voters would support such an amendment. Constitutional amendments in Florida require 60% or more of the vote to pass, so if backers can convince a similar percentage of Floridians to vote for the measure, they will be in good political shape.
What’s next in Florida energy deregulation?
First the Florida Supreme Court must allow the ballot language to remain and the initiative’s backers must reach the required number of signatures to place the amendment on the ballot. Following that, a heated political campaign will likely occur between those who want this amendment to pass and those who oppose it. In the end, Florida voters will decide whether they believe energy deregulation will be helpful in working to bring down the price of energy, increase market competition and efficiencies, and be an overall benefit for the state. The alternative for Florida residents is the status quo monopoly, which provides little to no recourse for customers who would prefer to join the ranks of those in states like Texas who have deregulated and are working to continue to lower energy costs.