Industry Basics in Deregulated Markets

There are four fundamental components of the electricity industry in the deregulated marketplace, these include: generation, retail electric supply, transmission, and distribution.

Generation – Electricity is generated at power plants. Generation plants are powered through the use of coal, natural gas, nuclear fission, hydro, and a small-but-growing percentage of renewable generation sources such as wind, solar, and biomass fuels.

Retail Electric Supplier – A Retail Electric Supplier is a business that sells electricity to residential and/or commercial customers in a competitive market. These entities may buy their electric generation on the open market and resell to their customers. To be a Retail Electric Supplier a supplier must be certified by the public utility commission and complete the utility’s registration process. mc² is a licensed Retail Electric Supplier in the states of Illinois and Ohio.

Transmission – The movement of electricity at high voltage from the generation plants to the local distribution power grid. This is typically regulated by the Federal Energy Regulatory Commission (FERC).

Distribution – The process of local delivery of electricity to homes and businesses, including the management and responsibility for reading the meters and maintaining the local utility distribution network.