U.S. Department of Energy - Energy Efficiency and Renewable Energy

Distributed Energy Program

Deregulation of Gas and Electricity Markets

The objective of deregulation is to offer energy customers greater choice, both among suppliers and services. Ideally, that will result in increased efficiency and dollar savings. Under competition, companies have to find innovative ways to attract customers such as cutting costs and dropping prices.

Deregulation is also expected to increase the reliability of energy supplies because deregulating industries attract new investment capital that can be used to expand and improve their infrastructure. Additionally, deregulating industries typically see an increase in the numbers of companies offering the product or service; as a consequence, deregulation may increase the number of back-up suppliers if one company experiences problems.

Deregulation also promotes new technology. Companies have more incentive to develop and introduce innovations because they can profit from those that succeed.

For more information about deregulation in energy markets, visit one of the following links: