Energy deregulation in the United States was approved by federal legislature in 1998. However, this new law left it up to each state to enact its own deregulation laws. The effect was that larger, commercial companies were able to take a small share of the previously federally regulated wholesale energy markets. However, the states were slow in allowing deregulation for retail and consumer energy markets. It was not until late 2006 that there seemed to be a glimmer of action.

Texas passed deregulation of most of its electricity markets and a parts of its natural gas markets in 2007, thus allowing the long awaited third party competition and subsequent rate reductions in the service areas covered by incumbent Energy Service Companies (ESCOs) Reliant Energy, TXU, WTU Retail Energy, CPL Retail Energy, and First Choice Power. Consumers now had the ability to choose a different ESCO to get lower rates on their electricity and natural gas utility bills.

New York followed soon after Texas, allowing deregulation in the five boroughs and parts of Westchester and Suffolk Counties. The deregulation was in the service area covered by the largest ESCO in New York, ConEd.

Illinois took a small step forward by allowing the NiCor service area (Natural gas), which serviced the Chicago and surrounding suburbs to be deregulated. Georgia, Ohio, and Michigan also have limited deregulated energy markets.

New York allowed additional deregulation of the NorthernGrid service area in northern New York State in November of 2008 which covered the Buffalo, Albany, Rochester, Syracuse, and Niagara Falls areas.

Separating Fact from Myth

Most people are not aware how their electricity and natural gas actually arrives at their home or business. All they see and all they know, is that the company they are paying the bills to are the ones providing their energy. In fact there are several entities involved in the production and delivery of the actual usable energy products.

The first step in getting electricity and natural gas to your home or business is the actual production of the end product. These facilities are state owned, but must also conform to federal regulations.

The next step in the process is the delivery mechanism – how the refined natural gas and how the converted electricity are sent from the production facility to your home or business via pipelines, cables, or wires. Much of the network of pipeline is and wires are owned by private corporations which must conform to state regulations.

The last entity is the energy service provider. Traditionally, most of these providers have been the same companies that owned the delivery systems, which is one factor as to why deregulation of energy was considered in the first place. Much like the telephone companies of a few decades ago, politicians and business people thought that much control constituted a monopoly because consumers had no choice in whom provided their energy service or how much they had to pay for that service.

Energy Service Companies (ESCOs) are merely companies that provide customer service, advertising, marketing, billing, collections, and most importantly -- rates.

It doesn’t matter who the ESCO is. The electricity and natural gas that is delivered to your home or office arrives in the same exact method, via the same exact wire, cable or pipeline and is, in fact, the same exact product. Even the person who reads your meter stays the same.

The only difference is in the price you pay when you have the option to choose your ESCO because your state has allowed deregulation of energy.

How Independent ESCOs Provide Lower Rates

Incumbent ESCOs (mentioned above, or the ones you might be customers of right now) have a legacy of doing business in the traditional sense. In order to maintain good customer service, they open up offices in several localities and hire staff to work at each. Additionally, since these companies operated their own transfer stations and lines, they have employees on their payrolls for those jobs as well. These companies have been in business for many years, and as they are state regulated, many of their employees have retirement and pension plans. Not only are these companies paying their current employees, but past employees as well.

Then there are advertising costs, vehicles for the meter readers and repair crews, upkeep on all their facilities, etc.

Most of today’s independent ESCOs are doing business in a different way. They incorporate affiliate or home based business opportunities in where the operation can be run out of one single office with a minimal staff. The rest of the work is done by independent network marketers, or affiliates. These individuals only get paid for the sales they make or for build teams of marketers. This frees the ESCO of many costs which are then passed along to the customers in the form of lower rates, customer incentives, promotions, etc.

The work of advertising is done by the marketers, although many of the companies provide a myriad amount of ready to use tools and promotional materials. Customer gathering is done by the marketers, Customer service is handled by the ESCO. Otherwise the customers enjoy the same exact electricity and natural gas and call the same numbers they always have in case of emergencies or power outages.

One of the largest factors in lower rates is that the large energy companies usually buy their energy far in advance, expending huge amounts of money. Most of the independent ESCOs buy their energy in smaller quantities and usually at a discount.

Where to find Discounted Energy

There are a handful of independent energy service companies that have sprung up to seize the incredible opportunity created through energy deregulation. Each presents their business opportunities in a different way and offers their customers a varied degree of rate plans to help people save money on their energy utility bills, as well customer incentives entice them to switch.

The following companies have become the most established in the short time that retail, or residential, energy deregulation had begun at the state level. The following are websites presented by each company. They are listed in order of rating, the highest quality or value listed in the first position. Each was evaluated the security and financial strength of the companies, their business opportunities, and their customer service and rates.

As a prospective marketer or customer, you should carefully evaluate each company and see which is best for you. Also keep in mind that although the services offered by each may only be in a few states, the business opportunities are open to residents of all 50 US states (unless otherwise stated) and has not prevented individuals from making good incomes, no matter where they live. Customers of all of these companies are enjoying lower rates than incumbent utility service providers, but some customers are receiving better incentives and perks.

I was wondering why they wouldn't suggest joining an ESCO..? Then I found out that they didn't have the law that NY Governor Pataki made in NY regarding the deregulation of natural gas suppliers!!

Published: December 16, 2008

By William Moseley, Director of Operations for California Utility Billing Services

Like all professionals in the real estate industry, multifamily property managers have had their priorities dramatically shifted by the current economic downturn. The combination of falling housing prices and the growing unemployment rate has made attracting and retaining residents a more difficult task. Consequently, some property managers are being forced to lower rents or provide concessions in order to attract and/or retain residents. For Western National Property Management, the number-one goal for property managers in the current economic climate is to protect rental rates and economic occupancy.

Because maintaining Net Operating Income (NOI) is the top priority for property managers in today’s economy, greater attention is being paid to operating costs that could negatively affect the bottom line. Perhaps the most significant operating cost for multifamily properties is the cost of utilities. As a result, many property managers are working to implement programs that can help reduce utility costs.

This is not a temporary problem that will pass when the economy improves as the current credit crisis has had little effect on the overall hard costs of utilities. For example, in southern California, property managers face a consistent rise in the cost of water. These increased costs are not related directly to the country’s current economic situation, but because of the scarcity of the resource. Conservation is a key factor in making sure that ample water supply is available for new and existing developments, and as water continues to be scarce, costs will continue to rise.

The cost of water can also be particularly high for communities based at higher elevations, which require pumping mechanisms to deliver their water supply. These communities incur pumping surcharges, which is an energy cost that is directly affected by the price of oil. Escalating fuel costs have also been a major factor in the increased cost of other utilities, particularly trash service. As fuel prices rise, many trash service providers are adding fuel surcharges.

Sewage costs are also on the rise locally. As federal regulations have increased, the treatment of sewage is more costly and older infrastructures need improvements to meet these more stringent regulations. Infrastructure improvements to meet this need can also translate to an increase in per unit costs. The city of Long Beach, Calif. is a prime example of this. Voters passed a ballot measure during the recent election in November 2008 called the “Long Beach Infrastructure Reinvestment Act.” This ordinance calls for a special parcel tax to account for much needed infrastructure updates. For multifamily property managers, this ordinance means an annual increase of $120 per unit. These types of tax increases that make up for old infrastructure unable to support current needs are likely to become a national trend, particularly in older cities.

Electricity and gas expenses are less of an issue since individual units receive services directly from the utility company and residents are responsible for the bill. Only the common areas shared by residents incur charges for the building. If an older structure still has master-metered electricity or gas utilities for the units, there are inexpensive sub-metering devices available that can help allocate the utility costs to the units.

With all of these increased utility costs, the challenge for property managers is significant in order to manage the increase without raising rents. As a result, Western National Property Management, like other multifamily property managers around the country, is working hard to implement cost cutting initiatives to manage the issue. Executing energy efficiency updates on property are a major defense against the rising costs of utilities.

There are steps that property managers can take to help manage the situation. Retrofitting plumbing is one effective tactic to curb the high cost of water. This involves the simple and inexpensive installation of devices that replace or modify existing plumbing fixtures to conserve water by restricting flow or displacing volume. Retrofitting is effective on toilets, showers and bathroom and kitchen faucets and there are incentives and rebates that can reduce the cost of these improvements.

Property managers can greatly decrease utility costs by changing top loading washing machines to front load or energy efficient machines. Many property managers find these more environmentally friendly and energy efficient machines pay for themselves in one year through the savings in both water and sewage costs.

Intelligent irrigation equipment is another solution to managing rising utility costs. Employing smarter landscaping in general will help conserve water and keep costs down.

Another very effective strategy to lower utility costs for apartment managers is sub metering. Submetering permits the measurement of utility use in individual units through a building-owned meter that is installed for each unit. Submeters are owned by the building, not by the utility company. This allows the building to continue purchasing its utility at the cheaper, commercial bulk rate, but each individual unit is billed directly by the utility company based on consumption. This strategy is very effective in reducing utility costs by encouraging individual conservation and ultimately increasing property value.

In the event of an increase in utility costs, residents are more likely to accept an increased bill for a utility whereas an increase in rent to cover these costs is often perceived as the property management company trying to profit from residents.

Alternate energy sources such as the use of solar panels may be seen with greater frequency in the future. Some utility companies do offer programs that involve the use of alternate energy sources to make properties more environmentally friendly and cut costs. However, many of these programs lack sufficient funding. In the current market, property managers are unlikely to participate in these programs without the promise of a guaranteed return.

As an industry, property managers are looking to each other to help weather the storm of the economic downturn. Rather than focusing only on the bottom line, many are looking to like communities to compare utility costs and what is driving them to determine the best practices for managing costs without increasing rents.

Organizations such as the California Utility Billing Services (CUBS) can help companies such as Western National Property Management and others make these comparisons and help managers implement allocation formulas and submetering programs to prepare and provide bills for residents that can remove that highly variable expense from the property overhead. This helps keep rents stable, increase conservation and provides residents with a direct influence over one of their living costs.

BUFFALO, N.Y. (WIVB) - - They were just looking to save money on their gas bill, but many western new yorkers ended up getting burned by independent energy services companies. Many victims Called 4 Action and now all those complaints are getting action.

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