You’ve heard the terms “energy choice” and “deregulation”, but did you realize their long and interesting history go all the way back to the Great Depression? Let’s take a look at the timeline of energy choice!
1929 – The Wall Street Crash
During the Great Depression, at the time of the stock market crash, many companies across America including some of those in the energy industry, collapsed. By 1932, most of the investor-owned electric industry belonged to eight of the largest utility holding companies in the United States, creating an imbalance within the energy market.
1935 – Public Utilities Holding Company Act (PUHCA)
In order to prevent unfair practices sometimes associated with monopolies, congress passed the PUHCA which was the first step in regulating the energy industry, and one of many initiatives put in place. The intent of the PUHCA was to prevent holding companies from being able to recover expenses twice, which sometimes occurred when a utility operated in multiple states.
Some of the regulations in the PUHCA included were:
The SEC approved formulas that helped ratepayers of a particular state to only pay for the share of common service company expenses
Non-utility business had to be kept apart from regulated utility business
All holding companies needed to register with the Securities and Exchange Commission
The Securities and Exchange Commission then had to limit the holding company to ownership of one integrated system. (They achieved this through divesting securities from other unrelated companies and other public utilities.)
1970s – Energy Crisis
A petroleum shortage in the 1970s increased the price of oil from $3 per barrel to $12 per barrel and encouraged citizens to work diligently to conserve as much energy as possible. As a result, many conservation rules were put in place until 1974.
Despite conservation efforts, the cost of oil remained high, resulting in much approved legislation throughout the decade relating to utilizing other forms of energy to reduce the United States’ dependence on oil and fossil fuels. Some of this legislation includes the 1973 Emergency Petroleum Allocation Act and the Energy Policy and Conservation Act in 1975.
1977 – Department of Energy
One of the most notable results of the energy crisis was the creation of the Department of Energy. Established in 1977 and still in operation today, this state-run department promotes advancing technology related to energy within the United States.
1992 – National Energy Policy Act
Creating an outline for the competitive wholesale electricity generation market, the National Energy Policy Act also brought about a new type of energy producer known as the Exempt Wholesale Generator (EWG), and allowed for private market competition of wholesale electricity generation which helped pave the way to energy deregulation in the United States.
The National Energy Policy Act authorized and encouraged agencies to participate in programs to increase energy efficiency and promoted water conservation or the management of electricity demand conducted by gas, water, or electric utilities and generally available to customers of such utilities.
1996 – Order 888
Order 888 required utilities to make available open access non-discriminatory transmission services which resulted in the separation of transmission services from power plants, interrupting some of the vertical integration systems within utilities.
1999 – Partial Deregulation Legislation and Order 2000
On the heels of Order 888, California, Texas, Rhode Island, New York, Pennsylvania and Massachusetts adopted partial energy deregulation legislation giving consumers access to private energy suppliers.
Order 2000 helped to facilitate energy deregulation by creating Regional Transmission Organizations (RTOs), which replaced state operation and control over the transmission grid.
2005 – Energy Policy Act
The Energy Policy Act, signed by President Bush in 2005, transferred the regulation of utilities from the Securities and Exchange Commission to the Federal Energy Regulatory Commission (FERC). This organization originated as a part of the Department of Energy but later became the primary regulator for energy within every state across America.
FERC has many duties and responsibilities including:
Regulation of the wholesale sale and transmission of natural gas and electricity
Reviewing interstate and natural gas pipelines, storage, etc.
Regulation of interstate commerce for the transportation of oil by pipeline
2012 – Energy Deregulation in the United States
By 2012, energy deregulation arrived in nearly two dozen states, some with both a deregulated electric and natural gas market, and some with one or the other.
AEP Energy is proud to be a certified retail electricity and natural gas supplier! We’ve been serving multiple deregulated states since 2002. To see if we serve your community, check here. Energy choice gives you the power to choose a custom plan with a price, term and renewable or traditional energy options to fit your needs.
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