Have you heard Warren Buffet say that the largest transfer of wealth in US history will be due to energy deregulation?
Why would this billionaire think there is so much money being transferred in this country and beyond? Many new companies are springing up in the energy industry, but what is causing all this turmoil?
This is why. The Federal Government recently deregulated the electricity industry, claiming that Public Services was a monopoly.
Who cares if the energy is deregulated, what does this mean for me?
This is how deregulation works. Previously, commercial and residential customers were required to purchase electricity from the state-mandated utility company. In 23 states where deregulation has already been approved, the government is injecting competition into the market. The theory is that competition will drive down outrageous electricity prices. In many New England states, many people have already switched to a cheaper electricity provider.
In Connecticut, for example, deregulation of the housing market occurred just two years ago. The once-dominant Connecticut Light and Power monopoly has now lost 30-40% of its customers to new sources of lower rates.
These ingredients are the recipe for the greatest transfer of wealth today.
Energy is a $300 billion a year industry. The last time something similar happened was when the government deregulated the phone industry in the 1980s. At the time, AT&T was the sole provider of phone services and was valued at $24 billion. Now there are many phone providers.
The energy industry is at least 10 times larger than the telephone industry and this could mean big savings for some. Take a look and see if your state has opened up to competition. If it’s unregulated, see if you can get a reduced electric rate.