Energy Market Regulation and Deregulation
In various states, leaders have formulated regulations to control energy markets. Their aim is to protect citizens from exploitation and prevent failure at the market. In other nations, rules allow them to free their energy market to facilitate competition. In this context, deregulation at the market place is vital. This is because it enables clients to select individuals to supply them with energy. These suppliers are expected to use the best rates to enable customers to benefit from reduced expenses.
America is among the nations that regulate energy at the market. This form of control is vital to clients especially when regulators formulate guidelines that enable them to operate. Rules are significant in a way that they protect the interests of the public. This is evident when it determines the cost of commodities and services. The Federal Energy Regulatory Commission (FERC) is a government agency that regulates supply of oil, natural gas and electricity (Kramer, A. S. & Fusaro, P. C. 2010, 214). The responsibility of an industry regulator is to assess the market at the wholesale level. They control prices at the market by ensuring that suppliers are fair in their deals.
The agency serves a purpose of protecting clients against exploitation via imposing regulations that are applicable. However, individuals who oppose regulations at the market hinder the spirit of competition. This is clear when they force firms to abandon activities at the market. Restructuring is a procedure that has disrupted the incentive system of energy production. As a result, this has effects on financial structure and decision of a company. Deregulation of energy market made Germany to eradicate the monopoly system. This made it hard for citizens in developing states to have access to fundamental needs. Competition at the market is significant because it enables clients to receive consistent and quality services. It also grants customers opportunity to select their favorable suppliers.
References
Electricity Deregulation, n.d. OpenSecrets.org. Available at <https://www.opensecrets.org/news/issues/electricity/> [Accessed 5 April 2014]
Kramer, A. S., & Fusaro, P. C., 2010. Energy and environmental project finance law and taxation: new investment techniques. New York, Oxford University Press.
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