Freedom Energy Logistics

The first disruption came from deregulation in the late 1900s and early 2000s. Deregulation required utility companies to divest themselves of energy generation. The idea was that third parties would come in to buy the plants and sell the energy to the utilities. They were wagering that energy prices would rise, providing them with a good profit.

 

At the same time, new players also entered the market to broker deals selling energy directly to the end users. These brokers created pressure to keep energy prices low. The result – power plant owners weren’t all able to survive.

 

Another disruption came from the discovery of natural gas reserves in western Pennsylvania (so called “shale gas”). This again drove prices down below what power plant owners were anticipating, and caused a 65% drop in the wholesale cost of electricity from 2014 to now.

 

Finally, in the last 18 months, there’s been an increased policy focus (state and federal) on encouraging renewables – biomass, hydro, solar and wind, with credits and subsidies increasing to encourage growth in those areas.

 

All of these pieces together have added volatility to the energy marketplace in the state.