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Apathy proves costly when it comes to electricity

Electricity deregulation is meant to bring the price of energy in line with the actual costs to produce that energy, but the policy also has mechanisms to help keep lower electricity prices.

The basic idea of electricity deregulation is to introduce competition into a market that has traditionally been dominated by monopolistic utility companies. These companies, having complete control over generation and transmission, would set electricity rates however they chose.

While some companies kept electricity prices low, others did not and many did not invest properly in new generation capacity. Under deregulation, customers can compare electricity rates and choose the one that best suits them, forcing electricity suppliers to improve in order to survive.

But this process does not work as effectively if consumers fail to shop for electricity provider. The Telegraph reports that a survey in the U.K., which itself has recently deregulated its energy industry, found that as many as 12 million people have failed to shop for lower prices on key services from insurance to electricity, despite annual savings that range as high as £557, or nearly $860, on energy bills alone.

Opinion Research in Pennsylvania found a similar lack of attention among many Pennsylvanians. The more customers show they are willing to switch electricity providers, however, the more companies will be forced to compete, pushing electricity prices even lower.