1) Deregulation of energy markets gives consumers the power to choose their energy provider by allowing competitive suppliers to enter the market. 2) Under deregulation, consumers can choose their energy supplier but not their distributor, whose prices are still regulated. 3) Deregulation benefits consumers by promoting competition between suppliers, leading to innovative product offerings and potentially lower prices.

1. Deregulation
Deregulation gives consumers choice- the
power of buyer
What is regulation?
In certain areas across North America, energy prices remain regulated. This means that all energy providing processes
including pricing are governed by a regulatory or government body, with only the local utility able to sell directly to
consumers. The utility or government set the prices for natural gas and electricity supply, along with the associated
transportation and distribution costs associated with those commodities. Consumers therefore have no choice when it
comes to their energy provider.
What is deregulation?
Deregulation has taken place in many states and provinces throughout North America. It has allowed competitive energy
suppliers to enter the markets and offer their energy supply products to consumers. Energy prices are not regulated in
these areas and consumers are not forced to receive supply from their utility. In deregulated markets, consumers can
choose their supplier. But consumer can’t choose their distributor and Grid. The transmission and distribution of natural
gas and electricity is not open to choice, and the price for those services continues to be set by state and federally
approved tariffs.
Why is deregulation important?
Deregulation gives consumers choice - the power of the buyer. A deregulated market allows consumers to choose
commodity supplier. It also motivates supplier to differentiate their products from the utility and those of competitors by
developing innovative features, pricing plans and options that would have otherwise not been available to you.
1) Consumer have option to choose your provider, whomever provide competitive pricing.
2) With more competition in the market, consumer benefit from a variety of product options that may have otherwise
not been available to consumer, including Just Green, which ensures that the equivalent of up to 100% of the
energy you consume is offset by sustainable energy sources.
3) Although natural gas and/or electricity supply will be coming from a new source, but local utility/distribution
company will continue to ensure the consistent delivery of the energy to consumer’s home.
4) The focus is no longer solely on the relationship between the utility company and its customer; the relationship
with other companies involved in supplying energy to the customer is also of critical importance.
Overview of company involve in process
Deregulation process, involve three group in delivering the utility
1) Generation for Electricity , or Production for Gas
2) TDUs (Transmission and distribution Utilities)
3) REPs( Retail suppliers )

2. Grid: - Grid generate the electricity or produce the gas but it need transit through the gas pipe line or electricity wire line.
Transmission and Distribution: - TDUs are responsible for getting the electricity or gas from the generators to your
home or business. The TDUs are also responsible for maintaining the necessary hardware – power lines and poles,
meters, etc. If you experience a power outage the first action taken should be to call your TDU.
The transmission grid moves wholesales power from generator to distributor. The distribution system moves retail power
from distributor to customers. Transmission will continue to be regulated at the federal level by FERC. Distribution will
continue to be regulated by the state commissioner.
Generator or Grid
Transmission &
Distribution utility
Retail Supplier Retail Supplier
1) Substation get the electricity
from Main Generator and, during
peak demand, auxiliary Generator
GENERATOS
Feeder Lines: -Each substation has feeder lines
Transformer
Service Drop Line:-
Lateral lines: - Carry Carry Power from
Electricity to customer Lateral Lines to home
Substation
Home Home
Transformer Distribution

3. REPs( Retail suppliers ) :- The companies involved in supplying the customer are termed supplier (service providers).
All the supplier gets the gas/electricity from Distributor and supply it to the customer. They can ask for the competitive
price to customer.
How consumer can take the benefit?
Once consumer move in to a place he can search about the utility provider at his/her area. After getting the provider, he
need to call the utility consumer or search online to check the existing supplier in his/her area. On the basis of good rate
and other benefit, consumer can choose the service provider. Consumer has the following option in deregulation market
1) Add supplier
2) Change Supplier
3) Drop Supplier
Service Agreement
Service provider have service agreement that signed between supplier and distributor. Service agreement is the
agreement between the two service providers with reference to a deregulation process. The service provider agreement
controls the following processes:
o Supplier view: Cancellation processing (former supplier) and registration for supply (new supplier)
o Distributor view: Change of supplier (including start and end of supply)
The transmission and distribution of natural gas and electricity is not open to choice, and the price for those services
continues to be set by state and federally approved tariffs.
Supplier Scenarios
In the regulated energy market, energy supply to a customer is performed by one company (“the utility company”). In the
deregulated energy market, energy supply to a customer is performed by a combination of companies, each taking on a
clearly defined function. In this context, a distinction is made between distributors (Companies that provide the supply
grid) and suppliers (Companies that supply the energy). Depending on the type of market, additional functions can also be
required in energy supply. For example, another function might be that of the settlement coordinator, who is in charge of
settlement of energy quantities.
We can have multiple scenarios based on the situation of deregulated market but in this document we are describing the
supply scenarios that are based on a scenario in which one company (referred to here as Company A), which comprises
the divisions Distributor and Supplier, operates a system in which both divisions are active (meaning that both bill for
services they have performed).
Below diagram has the overview of all the 3 scenarios, in later part of the document we will describe in detail about these
scenario .

4. Point of Delivery supplied by Company A
Point of Delivery with Energy Feed in EFG
Point of Delivery Not Supplied by Company A
The system analyzes the following service types:
Service Type Description Service Category
Grid Grid usage Distribution
SUPP Supply Supply
SCOO Settlement coordination Settlement coordination
The following own service providers are defined:
Service Provider Description Service Type
A-D Company A as distributor GRID
A-S Company A as supplier SUPP
The following supply scenarios are defined:
Grid Area for company A Control Area: CON1
Grid Area: Grid1

5. Supply Scenario Description
001 Grid usage
002 Full supply
003 Supply in third party grid
Before start the detail description of scenarios I would like to describe few term that I am using in the description of
scenarios
Point Of delivery: - Point to which a utility service is supplied, or for which a utility service can be determined. A point of
delivery can be identified by a unique key, called the point of delivery ID.
Control Area: - We are using this term to denote the whole big city.
Grid Area: - We are using it to define the different county of the city. There could be multiple grid in one control area.
Supply Scenario Grid Usage (001):-
Grid Usage describe the supply situation of point of delivery that are supplied by an external provider in the grid area of
company A. So Company A is perform as grid usage service in the energy supply to the Point of delivery. Company A
does not performs as supply services.
Point of deliver not supplied by company A
As delivery service preform by the external supplier and therefore not billed in Company A’s system. Company A saves
the consumer data as non- billable service. Company A require this data to perform the settlement services. So there is
no contract between company A and Consumer for Bill.
In the supply scenario for grid usage that is described here, there is no direct (billing-relevant) contractual relationship
between companies A and the customer of the point of delivery. The grid usage contract is used here to bill the supplier
for the grid usage costs incurred by the point of delivery. The customer has a contract with the supplier, in which the total
supply costs (supply plus grid usage) are billed.
Grid Area of Company A Control Area Con1

6. Supply Scenario Full Supply (002)
The supply scenario Full Supply describes the supply situation of the points of delivery in the grid area for company A that
are supplied by company A’s own supplier. This means that company A performs both grid usage and supply services in
energy supply to the point of delivery.
Point of delivery supplied by company A
Point of delivery supplied by A’s
 A billable service performed by company A at the point of delivery. This means two billable services are created:
One for grid usage (grid usage) and one for supply (supply usage).
Each billable service is allocated the corresponding service provider (division of company A) who performs the
service. This means that company A is not regarded as the company in charge of the full supply of the point of
delivery (grid usage and supply).
 Even though two billable services are billed in the system for the point of delivery, company A has a defined
contractual relationship with the customer of the point of delivery. This relationship is represented by the supply
billable service.
The grid usage contract is used here to determine the grid usage costs, which are passed on to the company’s
own supplier. This is expressed by the invoicing service provider A-S in the grid usage contract.
The supplier (A-S) bills the total costs of supply (according to the contractual agreements with the customer) in
accordance with the supply contract.
Supply Scenario Supply in Third Party Grid (003)
The supply scenario Supply in Third Party Grid describes the supply situation of the points of delivery outside the grid
area for company A that are supplied by company A’s own supplier. This means company A performs the supply service
Control Area Con1Grid Area of Company A

7. for the point of delivery. The grid usage service is performed by an external distributor, in whose grid area the point of
delivery is located.
Point of Delivery supplied by Company EFG
 Grid usage services are performed by an external distributor and are therefore not billed in Company A’s system.
This means data on the distributor is managed as for a non-billable service. Data on the distributor is required for
process control (for example, data exchange, and settlement of energy quantities).
 A supply contract is created for service provider A-S (company A as supplier) for use in billing for the point of
delivery.
Summary
Following is the list of highlights
 The historic practice of providing consumers with electricity from a monopoly provider is not as efficient
economically as it used to be due to the growth in independent power plant developers and competitive wholesale
electricity markets. Giving retail customers the opportunity to choose their power supplier is expected to stimulate
markets to reduce power costs and increase power.
 Now that this process has been launched, the industry is restructuring itself to adapt to competition. The path
forward is not fully known, but will involve existing utilities selling off their power generators as well, perhaps, as
transmission lines.
 Competitive power markets are based on bids by generators into a single market, generally on an hourly basis.
Market prices have been volatile. Prices are expected to continue to be volatile and may become more so, unless
new generation and transmission can be constructed to meet rising power demand.
From its founding in 2007, Avertra has been a global technology development and
Consulting company, servicing the USA, the Americas and several countries throughout
Europe, Asia and the Middle East.
© 2016 Avertra.
AVERTRA.COM
Khurram Siddique, Aug2016
Grid Area: Grid1 Control Area: Con1