What is Energy Deregulation?

What is deregulation?

Deregulation for natural gas simply means that you now have a choice in where you get your energy. Previously, natural gas in California was regulated, and all-natural gas came from one utility provider. Now that there is a choice, energy users can choose from multiple energy providers based on rates that best suit their needs as well as specialized product offerings.

Since the early 1990s, the California Public Utilities Commission (CPUC) has overseen the deregulation of the natural gas industry to allow nearly 11 million residential and small commercial customers in the three major utility areas (PG&E, SoCalGas and SDG&E) to choose their natural gas supplier. However, due to the California Energy Crisis of 2000 and 2001, there was a long suspension of this deregulated policy that was known as Direct Access, but the industry is now deregulated once again.

Today in California, independent supply companies sell natural gas directly to the consumer while the utilities continue to deliver natural gas to you. These supply companies are called Core Transport Agents (CTA), which is what Callective Energy is.

Generally speaking, the typical energy bill consists of Supply (the actual commodity – electricity or gas), and the Delivery (the pipes and wires that get the energy to your home or business). Historically, utility companies owned both Supply and Delivery, and while their prices were controlled by regulatory bodies like Public Utilities Commissions, there was no competition to drive prices lower for the consumer.

Under deregulation, utility companies will still deliver the natural gas to you, but your supplier is your choice.

Common questions about deregulation


California, Connecticut, the District of Columbia, Delaware, Illinois, Massachusetts, Maryland, Maine, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas.


Multiple states passed legislation in the late ’90s that opened up the energy industry. Opening up the industry created healthy competition by dropping the utility companies into the market with new competitive gas or electric suppliers. Since then, and over the last decade, competition has flourished and consumers are experiencing great savings on their energy bills.

Why is deregulation in the energy sector necessary??

Deregulation grants energy users the ability to obtain a better understanding of energy, its costs, and how to conserve it. Because there are so many different energy providers, this allows customers to see what plans and companies work the best for them. As a result, this creates competition between the energy firms and motivates them to provide the best service to their customers. Without deregulation, customers wouldn't be able to choose companies that are more aware of the energy we use and how to use it efficiently.

Now that you have an understanding of why you have a choice as an energy user, and why energy deregulation is a positive decision for California, see our rates and join Callective Energy now!