In 2022, there have been many changes to energy deregulation throughout the United States and in the retail energy industry. In this article, we summarize some of the latest news events in the deregulated energy sector and predict things to come in 2023. This article can be valuable to energy brokers selling deregulated energy, customers shopping for energy suppliers, and those wondering about the differences between regulated and deregulated energy markets.
Energy Deregulation in 2022
In 2022, many exciting things happened in deregulated energy states. From new regulations to states thinking about deregulating their utilities for the first time, 2022 was a happening year for the wholesale and retail energy markets. Here are some of the highlights:
Texas Electricity Market Overhaul Discussions
Texas faced an energy crisis in 2021 when an unexpected Winter storm ravaged the state. This storm caused several electricity generators to go offline and spiked energy prices by over 2,000%. From this chaos came talks of restructuring the deregulated electricity market in Texas. Texas is a state that does not have a capacity market, unlike other deregulated states. Capacity markets redirect monies to electric generators so that there is always enough power supply, even during times of crisis. State regulators are currently debating whether Texas should adopt this model given the problems from Winter Storm Uri in 2021.
Wyoming Considers Adopting Partial Deregulation For Bitcoin Mining
The state of Wyoming, a regulated energy state, is considering deregulating certain areas of the state to attract larger energy users, such as bitcoin mining operations. In the debate of regulated vs. deregulated energy, deregulated energy always wins for large energy users. Since consumers in regulated states are forced to purchase electricity at a pre-determined rate, they have no control over lowering energy costs. State legislators in Wyoming recognized this and are considering opening up the state’s electricity utilities. Certain businesses, such as bitcoin mining operations, use large amounts of power to operate. Wyoming believes that if it deregulates portions of its electric grid, it will attract these new companies to relocate to the state.
The Days Of Energy Deregulation In Europe Could Be Ending
Europe has enjoyed energy deregulation for decades. But, the days of the free-trading energy markets could be coming to an end. As the Russia-Ukraine crisis continues to be undue stress on European energy markets, countries are stepping in to enact new regulations. In September, just days after taking office, Prime Minister Liz Truss enacted a policy to freeze consumers’ energy bills through the Winter. There is no clear understanding of how this governmental intervention will affect energy suppliers and energy deregulation in Europe, but it looks like things will never be the same again.
What’s Expected To Happen In 2023
As the energy markets evolve across the globe, there are many new and exciting things on the horizon for energy deregulation. In the United States, new territories like Arizona, Nevada, and Wyoming might vote on deregulating their electric utilities.
Other factors like renewable energy are having a direct impact on the deregulated markets as well. FERC passed Act 841 which requires all wholesale electricity markets to prepare for battery storage operators. In fact, this order requires wholesale electricity market operators to allow storage owners to become both purchasers and sellers of energy on the wholesale market. This order will create new opportunities for suppliers to provide energy storage solutions as part of their service offerings.
The United States enjoyed relatively lower electricity and natural gas prices for the better part of a decade. With recent happenings in the energy markets, prices are on the rise. In fact, energy prices today are nearly 200% higher than where they were just three years ago. Our prediction is that this price trend will continue into 2023, so it is important to consider locking in your energy supply rates at the right time.
Want To Learn More About Deregulation?
Deregulated energy is an exciting and ever-changing industry. Since the energy markets are closely tied to the global economy, they are continually transforming and reshaping in real-time. Whether you are a commercial customer looking to control your energy costs, or an energy broker trying to further your career, we can help you navigate the complexities of energy deregulation. Contact us today to learn more about deregulation, get your questions answered, or find the right energy partner.