If you live in a state with regulated utilities, you get an electric bill every month from your utility that tells you how much electricity you used and how much it cost. If you’re like most Americans, you simply accept the bill as an unchanging part of your monthly expenses and either have it paid automatically or quickly write a check. The only time you really think twice is if the bill is unusually high, but even then consumers rationalize it as a really hot month that needed a lot of air conditioning or the brand new big screen TV you just installed.
But have you ever taken the time to think about exactly where that electric bill comes from? Who decides how much a unit of energy costs? How do you know your utility is doing everything they can to keep costs down and service high? What if another company could provide your electricity more cheaply?
Regulated utilities act as monopolies, meaning that they can operate without competition as long as they follow rules designed to protect consumers. States with regulated utilities have a Public Utilities Commission (PUC), typically 3-5 energy experts who make and enforce the utility rules. The most important of the rules that they make, and the one that determines how much electricity costs, is called the Rate Tariff.
