National Overview of U.S. Natural Gas Deregulation for Businesses

For business owners across America, natural gas represents a significant operating expense. What many don't realize is that in over half of U.S. states, they have the power to choose their natural gas supplier—and that choice can translate into substantial cost savings.

This comprehensive guide provides a national overview of natural gas deregulation, explaining how it works, which states offer supplier choice, and how businesses can leverage competition to reduce their energy costs.

What Is Natural Gas Deregulation?

Natural gas deregulation refers to the restructuring of the natural gas industry to introduce competition in the supply portion of the market. In a deregulated (or "restructured") market, the natural gas supply chain is divided into two components:

• Supply (Commodity): The actual natural gas you consume. In deregulated markets, you can purchase this from any licensed supplier—not just your utility.
• Delivery (Distribution): The transportation of gas through pipelines to your facility. This remains a regulated monopoly handled by your local utility.

This separation creates competition among suppliers, who must compete on price and service to win your business. Your local utility continues to deliver gas safely and reliably, regardless of which supplier you choose.

History of U.S. Natural Gas Deregulation

The path to natural gas deregulation in the United States spans several decades:

Federal Foundation (1978-1992)

• Natural Gas Policy Act of 1978: Began phasing out federal price controls on natural gas
• Natural Gas Wellhead Decontrol Act of 1989: Completed the removal of wellhead price controls
• FERC Order 636 (1992): Required interstate pipelines to separate transportation from sales, enabling wholesale competition

State-Level Retail Choice (1990s-2000s)

Following federal restructuring, individual states began implementing retail choice programs:

• Early adopters like Georgia, Ohio, and New York launched programs in the late 1990s
• Many states expanded programs to include residential customers in the 2000s
• Today, 27 states offer some form of natural gas supplier choice

Deregulated Natural Gas States

The following 27 states offer natural gas supplier choice for commercial customers:

How Deregulation Benefits Businesses

Commercial customers in deregulated markets enjoy several advantages:

1. Lower Costs

Competition among suppliers typically results in rates 20-40% below default utility pricing. For a business spending $100,000 annually on natural gas, this could mean $20,000-$40,000 in savings.

2. Price Stability

Fixed-rate contracts allow businesses to lock in rates for 12-36 months, protecting budgets from volatile market swings and seasonal price spikes.

3. Contract Flexibility

Unlike one-size-fits-all utility rates, competitive suppliers offer various pricing structures:

• Fixed rates for budget certainty
• Variable rates for market participation
• Hybrid structures balancing both
• Index-plus pricing for transparency

4. Green Energy Options

Many suppliers offer renewable natural gas (RNG) and carbon offset programs, helping businesses meet sustainability goals.

5. No Service Disruption

Switching suppliers is purely administrative—your utility continues to deliver gas through the same infrastructure with no interruption.

How the Switching Process Works

The process for switching natural gas suppliers is similar across most deregulated states:

1. Gather Information: Collect recent gas bills, account numbers, and usage data
2. Request Quotes: Contact suppliers or work with a broker to obtain competitive bids
3. Compare Offers: Evaluate rates, terms, and supplier reputation
4. Sign Contract: Execute agreement with chosen supplier
5. Enrollment: Supplier submits enrollment to your utility
6. Service Begins: New rate takes effect at next billing cycle (typically 30-60 days)

The Role of Energy Brokers

Many businesses work with energy brokers to navigate deregulated markets. Brokers provide value by:

• Soliciting competitive bids from multiple suppliers
• Analyzing usage patterns and recommending optimal strategies
• Negotiating contract terms on your behalf
• Managing the enrollment process
• Providing ongoing account support

Importantly, broker services are typically free to the customer—suppliers pay brokers for bringing them qualified business.

Understanding Your Bill

In deregulated markets, your natural gas bill includes several components:

• Supply Charge: Cost of natural gas commodity (set by your supplier)
• Delivery Charge: Cost to transport gas to your facility (set by utility, regulated)
• Customer Charge: Fixed monthly account fee (utility)
• Taxes & Fees: State and local taxes, regulatory fees

When you switch suppliers, only the supply charge changes. Delivery charges remain the same regardless of supplier.

Common Questions About Deregulation

Getting Started

If your business is located in a deregulated state, taking advantage of supplier choice is one of the easiest ways to reduce operating costs. The process is straightforward, risk-free (your service continues uninterrupted), and typically results in significant savings.

To get started:

1. Confirm your state offers supplier choice (see table above)
2. Gather your recent gas bills
3. Contact us for a free rate analysis

Our team of experienced energy brokers serves businesses in all 27 deregulated states, helping them navigate the market and secure the best possible rates.