It’s a consumer world out there—there’s no denying it—and one of the biggest impacts of consumerism is the fact that price isn’t always dictated by value. There are, when you think about it, some very peculiar things that can drive up the prices of even the most basic of items. A t-shirt can range from $5 to $500 based on a name brand alone. There is one thing that does help to save us (arguably) from over-inflating prices, though: competition.
Competition among brands inspires companies to keep their prices as competitively low as possible in order to attract more buyers. Think of it this way: if Bell decides to sell the iPhone 7 for $600 when Rogers is selling it for $900, then Rogers is going to have to find a way to lower its prices—or otherwise make its contract more appealing—if it’s going to stay in the game. It’s no different when it comes to the energy market.
Deregulation: creating a competitive market for Canadian energy
Deregulation of the natural gas market began in 1985 in Canada. Within 13 years, by 1998, the electricity market had begun to follow suit. The restructuring of the energy market resulted in more competitive rates and broader varieties of energy plans for consumers—without a regulated rate, energy providers had to find more creative ways to generate interest in their products over those of their competitors. That meant creating more options for consumers to choose from.
It wasn’t just about the rate. Competition can only keep the prices so low before a company has to find other ways to appeal to its demographic. For the energy market, that meant creating a variety of different rate plans that consumers could choose from based on their own needs, wants, and lifestyle.
For instance, consumers worried about an unpredictable future market and looking to maintain a predictable bill that is easy to budget, can lock into a fixed rate plan for the duration of a contract (usually 1-5 years long). Those who are hesitant about locking into a fixed rate can opt for a floating or variable rate that changes based on the current market price of energy. Some choose the regulated rate option, or the time-of-use or tiered plan, to get the lowest possible market rates at the time of use.
However, the deregulation of the energy market didn’t just create a variety of rate options to choose from; it also prompted companies to create rate plans that could cater specifically to the needs of their consumers. For instance, there are providers who offer competitive rates to large businesses that consume greater amounts of electricity and natural gas. There are also rate plans that cater to startups and small businesses, and, of course, there are rate plans that address a residential need or desire to start incorporating green or renewable energy sources into the home.
In other words, the deregulation of the energy market created an opportunity for consumers to shape the energy market by creating a competitive market that is forcing providers to market to the consumer using plans that are designed to appeal to their specific needs.
If you are looking for a way to make sure you are using the deregulated market to your greatest advantage, contact us at Energyrates.ca today.