Homeowners FAQs: taxes & financing

Utilities: One Price No Longer Fits All Homeowners

Deregulation is the keyword in utilities these days. It first hit the electricity providers and now is being implemented across the country with respect to natural gas, as well.

Before deregulation, the federal government regulated the price at which producers sold gas to pipeline companies and the price at which pipeline companies sold to local gas utilities. State regulatory commissions controlled the price utilities charged gas customers. Where the utilities made their money (and still do) was from delivering the gas and from servicing accounts.

Buying Direct

Since deregulation, natural gas customers can buy their gas directly from producers (but more often from non-regulated natural gas marketers), then pay the pipelines and utilities for delivery services. The new gas suppliers compete for sales to gas consumers by creating packages, such as gross purchasing, guaranteed prices for a year, etc.--something regulated utilities hadn't been able to do.

Note, however, that competition among suppliers is developing faster in some states than in others. Can you save money by choosing an alternate provider in a location where competition does exist? That will depend on the volume of gas you use, the supplier you choose, perhaps even on the weather conditions at the time of enrollment.

Comparison Shopping

Because of utility deregulation, you may now want to contact several utility providers. An easy way, we've discovered, to find all the providers available is to contact the dominant utility suppliers in the area. These organizations can then supply the names of the newer companies that offer services to that area. In fact, the older, established companies are legally required to provide this information.

To find out more about all types of utilities, and options in your area, check out The Utility Connection (www.utilityconnection.com). The site provides links to 4,032 utilities (electric, gas, water and wastewater), utility associations, organizations, news, magazines, utility financial resources, and related state and federal regulatory and information sites.

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