What you need to know about the New York state energy deregulation

You may or may not be aware, but New York was one of the very first States in the country to deregulate the gas and electricity markets. Before the deregulation occurred, local energy utility companies had all the power and control, which means that all aspects of energy supply including the processing, production, and delivery were handled by them. However, because of deregulation, New York residents and customers now enjoy the freedom of choice when it comes to selecting which company will supply their electricity or gas.

Deregulation was not only for the purpose of giving the customer more variety, but it was also aimed at encouraging competition in hopes of bringing energy costs down. To put it plainly, the New York state energy deregulation implies that while the delivery of both gas or electricity remains your utility’s duty, deregulation allows you to shop for as many energy supply rates as you want until you settle for a retail energy company that has everything that you are looking for.


The New York State Public Service Commission permitted plans to enable customers to choose which natural gas and electricity supply they would prefer to use instead of having to rely solely on the local utility company back in 1996. Hundreds of residential, commercial, and industrial consumers have since then opted to purchase their energy from an Energy Service Company (ESCO) of their choice instead of doing it from the utility. By 2008, the number of ESCO customers had risen up to 1.1 million customers in New York State, which is a true testament to the benefits if the New York state energy deregulation.

How effective has the deregulation been in New York?

Although New York still has a long way to go, the New York state energy deregulation has brought about gains. In fact, energy deregulation in New York is considered one of the most successful cases in the country. This is largely as a result of the New York Independent System Operator’s liberalization of the wholesale market which has ensured that prices remain on the lower side.

Additionally, the New York state energy deregulation also brought much-needed competition among suppliers. For every utility, there are at least 7 to 8 additional ESCO gas and electricity suppliers that customers can choose from. Because of the deregulation, electricity prices per kilowatt hour have also reduced significantly. As the state continues to invest in modern infrastructure, New York’s energy future has never looked brighter.