One of the effects of energy deregulation is rising prices, and greater volatility in prices, due to the change in policies that had previously dictated that energy utilities could only earn a set rate of profit on top of their operating costs. The idea with this policy change was that greater competition would incentivize utilities to reduce their costs. However, because traditional utility companies already had an effective monopoly on the infrastructure and generation capacity, it actually resulted in costs for consumers increasing because utility companies were no longer restricted in the amount of profit they earn (1). More widespread deregulation will likely result in similar increases in costs to consumers.
Energy resellers have become a booming new business in the deregulated marketplace. I see them frequently at the entrance to grocery stores and sometimes also going door to door in my neighbourhood in Philadelphia. They promise to offer customers lower, fixed rates on electricity than if they were to buy directly from the dominant electricity provider in their area. Grid management software companies and services also stand to profit from energy deregulation, due to additional independent energy producers contributing energy to the grid.
As an entrepreneur, I would work toward launching a home energy management technology company that would develop a home energy control system to help consumers manage the energy use of their home and take advantage of lowest-available energy prices. Deregulation means that in many areas, electricity costs more or less depending on the time of day. I would create a plug-and-play energy management application that would turn any home into a “smart home”. There would be a device connected to the circuit breaker box that would need to be programmed to know which appliances were on which circuits. This device would obtain real-time information on the cost of electricity via wifi and be able to communicate with a control panel in the living area of the home. The homeowner could program a day on which they wish to wash dishes, do laundry, etc and this device would activate those appliances at a time when the energy being supplied is the cheapest. It could also heat and cool the home based on energy prices rather than being programmed strictly on time.