advantages and disadvantages of using electricity
Electricity is one of the most important sources of energy consumed by people all over the world. It is used to light and heat homes, businesses and offices and it is also a vital source of revenue for utility companies. In order to get the best deals from their suppliers, consumers and businesses have to do a lot of research and planning. There are many advantages and disadvantages of using electricity from different providers and it is important that you know them before you sign on the dotted line.
There are basically two types of electricity suppliers. There are those that specialize in providing electricity supply and those that supply natural gas. Most countries, both developed and developing, have one or the other of these types of power suppliers. For example, in India, there is the Indian Association of Electrical Manufacturers and Power Generation (IIMPG) and in Japan, the National Electric Power Corporation (enesco) is the sole electricity supplier. In most developed countries, a wide network of power producers and distributors provide a comprehensive service to their customers.
There are also differences between electricity suppliers in terms of the services and the products that they offer. Some electricity companies sell their products directly to end-users while others form a distribution network and help to monitor the supply business. They have to follow strict regulations such as the Electricity Distribution Management Act 1992 which lays down rules and regulations for the safe handling, storage and disposal of all electricity and gas. All distribution companies are required to be licensed by the local government authorities. The aim is to protect the environment and promote good health and safety.
The main reasons why an electricity supplier forms a distribution network is because they can earn more from their wholesale customers than they could from retail customers. However, this arrangement also has its disadvantages. For one, they may charge higher rates than they could if their wholesale customers supplied them with cheaper products. They can also choose to increase their prices and pass these on to customers. This may lead to a price war and so may reduce customer satisfaction.
energy deregulation laws
Some European countries such as Ireland and Italy have energy deregulation laws. Under these laws, a change was made to the way electricity is sold and paid for in these countries. Customers are able to choose whether or not to join a particular electricity supplier, and only have to join if they want to. The introduction of direct competition resulted in cheaper energy bills for customers and it also resulted in more energy suppliers competing for new customers.
Fixed rate contracts are usually regulated by the Electricity Delivery Act 1992. Under this act, electricity suppliers are required to present a quotation to their customers. It states that the cost of the fixed rate will not rise during the term of the contract. The term can be up to thirty years and the price per kwh can never exceed the current market rate. This is meant to protect consumers from increases in price during contract periods.