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Is Energy Deregulation A Scam?

Updated on November 8, 2011

Have you ever got the phone call from someone you knew personally that claimed they could save you money on your electric bill? And that very same person claimed they had a business opportunity you could join and both of you would make so much money together? All of us have been in this position at least once. The very reason we receive those phone calls, get fliers in the mail and get invited out to hotel meetings is because of energy deregulation. The pertinent question we must ask is energy deregulation a scam or can we actually benefit from it? Even more specifically, can you actually save money on your bill each month and earn money through some of the businesses offered by select companies? This hub's main focus is to answer those questions and let you know whether or not energy deregulation is a scam.

Before we continue, I want you to be aware that I have turned a profit through energy deregulation since 2010. Also, since that time I have been able to thoroughly evaluate many of the companies participating in deregulation and performed extensive research to become educated and informed. This knowledge acquired will be given to you right now.

The deregulation of the energy market in the United States was enacted by our government and accepted on a state to state level. It's primary purpose is to introduce competition into a given area and create choice for consumers. You can refer to the map above to see if your state is eligible.

So to determine if energy deregulation is really a scam we first must ask this primary question: will someone who signs up with an energy supplier save money on their electric/ natural gas bill? The answer, in the majority of cases, is yes. The average savings annually for residential and small businesses is approximately 10%. For larger commercial accounts, the annual savings will vary, because of increased usage.

The aspect of deregulation that may raise some red flags are fixed rate contracts from suppliers. There are plenty of energy suppliers that have been accused and absolutely guilty of the ‘bait and switch’ technique. This happens when a customer will be promised a certain rate that they can 'lock in' and then two or three months later there is a higher rate on the customer's bill. Suppliers and brokers get away with this because there are some many customers that will sign up for the introductory rate that by the time the customers notice the rate has increased, the company has already made their money from that large number of customers. A rule-of-thumb to live by as a consumer is to search for a supplier that does not require you to sign a contract. If you do, however, want a fixed rate contract, locking you in for a predetermined time frame, ensure you find satisfied customers who can attest to the supplier's lower rate.

'Business Opportunities?'

The next questionable aspect of energy deregulation are the multitude of income opportunities available. For maximum distribution, energy companies will utilize a more direct means to acquire customers such as network marketing, just as companies like Mary Kay and Avon have done for decades to sell cosmetic products. This way, the company can acquire more customers without paying outrageous advertising costs and then compensate their representatives for their efforts. The main problem with these particular models, especially network marketing, is that most companies require you to pay a fee to join as a rep and a monthly fee for a website. Most logical human beings would write SCAM all over this because the company isn't offering a physical product to customers, only a lower rate on an existing service the customers already pays. If you are considering joining an energy company to earn income, join one that doesn't require fees to participate.

Now understand, there is a tremendous income opportunity available through deregulation, but it can be earned without paying the fees some companies charge. The problem with fees is simple. If you build a large organization, each person in your team has to pay on average $300-500 upfront and $15-30 a month and 90% never earn back their money. If this is true, how many people do you think will stay in the business? NOT MANY. If you take a hard look at the companies like Ignite, Viridian, AMA Nation and Ambit, the people earning the big checks account for less than 5% of the company. Meanwhile, the other peasants end up spending over $500 for the year, never turn a profit and damage relationships with people they know. The very fact some of these companies charge fees is why most people deem energy deregulation a scam.

So, Is Energy Deregulation A Scam?

Besides suspect rates from a few companies and fees required to join some income programs, the answer is absolutely no. Energy deregulation is only here to benefit customers and increase competition. Whether you just want to be a customer and save 10 bucks a month on your bill or you want to be a mover and take advantage of the income that is available, just be smart about it. Do your research, talk to people and most importantly, ask questions.

To assist you in this research process I have wrote the popular report, 'The 7 Must-Haves For Your Energy Business,' which will show you how to properly evaluate a company and not waste your time or money. I'll send this report straight to your email free of charge. Just visit

I also want to hear about your experience with energy deregulation. Leave your comments and questions below! :)

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