Regulated electric markets are home to vertically-integrated utilities that own or control the power plants that generate electricity, as well as all of the transmission and distribution equipment — such as the poles, wires, and transformers — that is used to distribute electricity to homes and businesses. In other words, you only have one option for your electric utility, who owns both the energy generated and the means to distribute it, and the rates your utility charges you are approved and regulated.
On the other hand, in a deregulated electric market, utilities are required to divest their ownership in generation and transmission. This means they are only responsible for:Distribution, operation, and maintenance from your interconnection to the power grid at your electric meterBilling you, the ratepayerAnd acting as your Provider of Last Resort
What this ultimately means is that in a deregulated market, you have a choice of who to buy your energy supply from, as multiple and competitive retail electric suppliers sell electricity to the businesses that use it. You pay these retail suppliers what’s often referred to as the “supply” portion of an electric bill. Competition affects the retail price you pay for your energy supply.
Which also means that as a customer in a deregulated energy market, you often see two bills: one from the competitive supplier (who is deregulated) for the supply portion of energy (typically measured in kilowatt hours) and one from your distribution utility (who is regulated, and who bills you based on an approved utility tariff) for the deliver of the energy you purchased. Natural gas markets operate in this way as well.