While each state handles deregulation differently, the bottom line is that it offers consumers more choices when it comes to electricity and natural gas service. This aims to increase the availability of energy service options for residents and brings with it a number of benefits, one of which being the ability to find more affordable service.
Both natural gas and electricity choice programs exist, though availability varies by state. Since 1992, the US has had electricity legislation. Starting with the Energy Policy Act of 1992, they began introducing deregulated energy states markets, however not all followed through with their efforts, limiting today’s options for residents in some areas.
States that have Deregulated Energy
|
|
Energy Deregulation Information by State
California
- Electricity: yes, but limited
- Gas: yes
In the 1990s, both California and Texas began passing deregulation laws that allowed competition in the electricity industry. In 1996, the first California energy bill passed. But during the California energy crisis, they suspended the programs because it had invested bonds in power companies. Once the electric companies paid off the bonds, a choice would be available again. Electricity choice was cited as being one of the main drivers behind the state’s 2001 electricity crisis. The result of the crisis has limited the scope of the state’s deregulation, preventing the majority of state businesses and residents from selecting among suppliers. Beyond electricity, those living in California do have the ability to choose among gas suppliers from a number of providers, whether from their local utility companies or another.
Connecticut
- Electricity: yes
- Gas: yes, but partial and limited
Deregulation in Connecticut began with the passage of law in 1998, with an act that helped establish a competitive market. The law forced companies to separate their “generation components” from the rest of their businesses, auctioning power plans and other generation assets. In moving away from a regulated system, the hope was that the ability to choose a provider would attract more individuals who could buy into service contracts and thus stimulate the economy. This course of action provides the consumers with the power as utility companies are limited in their ability to raise prices in order to stay competitive in the ever-expanding landscape.
Delaware
- Electricity: yes
- Gas: no
The Delaware Public Service Commission explains that while customer choice is a priority, potential electric suppliers must apply for and receive certification from the state before offering service to consumers. In the event that residents do choose to receive energy from a third-party supplier, they will still be billed by a utility provider because that entity is still the one responsible for distributing energy and managing the infrastructure. The difference with this route is that the third party will be responsible for supplying the electricity.
Georgia
- Electricity: yes
- Gas: yes, with limitations
It was in 1997 that the state of Georgia initially signed deregulation into being, giving residents the ability to choose providers and immediately making the landscape for energy suppliers more competitive. For those living in the state, the duration of contracts can last several years so by identifying the best available rates and plans, continued savings can be incurred over a significant span of time, even as prices go up. Even better, those living in Georgia have the ability to change from one service provider to another easily by signing up for a new plan online or over the phone.
Texas
- Electricity: yes
- Gas: no
The deregulation law in Texas began in 1999, breaking up the state’s public utility system. Before that legislation, a single provider administered electricity and customers had no choices. The goal of electricity deregulation was lower rates, increased competition, and more consumer choice. Critical in the enforcement of the regulations for the state is the Public Utility Commission (PUC), which is also responsible for aiding customers by addressing complaints. Additionally, the PUC is responsible for protecting the quality of the infrastructure and for keeping an eye on statewide energy competition to ensure that it is fair for all providers.
Illinois
- Electricity: yes
- Gas: yes
Electric deregulation has saved Illinois consumers a substantial amount of money since it was adopted in the early 2000s. Over the past 16 years, one news outlet has cited the total amount that consumers and businesses have saved to be nearly 37 billion dollars. The 1998 law changed the way they managed utilities, creating more competition and sparking new technology development. Though there weren’t many new entrants early on in the deregulated years, as of 2014 there were 87 providers serving the state. This has allowed Illinois to maintain some of the lowest electricity prices in the country.
Indiana
- Electricity: no
- Gas: yes
While Indiana’s Utility Regulatory Commission oversees electric utilities that include five investor-owned and nine municipal utilities, there are also 67 municipal electric utilities that are not under IURC jurisdiction. However, Indiana still regulates electricity rates, regardless of jurisdiction. In terms of average monthly electricity rates, Indiana’s are below the national average as some have questioned whether or not to deregulate it. Since 1998, natural gas in Indiana has been a choice for both commercial and residential users and it seems only time will tell if the power of selection for electricity is also surrendered to individuals.
Massachusetts
- Electricity: yes
- Gas: yes
Massachusetts has both electricity and natural gas deregulation, even providing a marketplace for its residents called Energy Switch Massachusetts for electricity consumers. Deregulation of the state occurred in 2005 and has caused thousands of consumers to switch their energy service provider. Competitive electric supply products factor in pricing, renewable electricity content, and other products and services suppliers may offer. The companies that serve the state have presented consumers with a number of options when it comes to an energy plan as individuals can opt for service from from 1 month to over 5 years.
Maine
- Electricity: yes
- Gas: yes
Maine used a Restructuring Act to take their electric utilities out of the generation business. This was done in 2000 by the Maine Public Utilities commission and gave consumers the ability to switch energy suppliers. Maine still regulates transmission and distribution utilities, keeping it from under the official umbrella. Like some other states, even after switching in Maine, residents will still have the same utility delivering gas. The difference is in the actual source of gas, which will be received from whichever company was chosen.
Maryland
- Electricity: yes
- Gas: yes
Maryland’s bill passed in 1999 after proceeding through the Maryland General Assembly. The Electric Customer Choice and Competition Act of 1999 was successful in allowing customers the choice to purchase power from local utilities or from electric retail suppliers. There are some limits to the choice provided as not all customers are eligible for choosing their gas provider by virtue of location in the state. The savings that switching in the state of Maryland can allow total anywhere from $20-$30 a month which will enable hundreds of dollars to be saved on the year.
Michigan
- Electricity: yes
- Gas: yes
Michigan’s Electricity Choice Program allows Alternative Electric Suppliers to offer power to consumers. The state’s Public Service Commission lists all the available electric utilities with Customer Choice, at least nine utility companies in total. This all began around 2002, in which the state opened up the choice of buying natural gas supply, no longer confining residents to receive service solely from their local utility company. For Michigan residents, this capability has allowed hundreds of thousands to opt for a different source of energy and save in the process.
New Hampshire
- Electricity: yes
- Gas: yes, with limitations
New Hampshire’s energy choice program started in 1998 after two years of planning and litigation that slowed its progress early on. While the state explains that most residential customers in restructured franchise areas use Default Energy Service, competitive suppliers do offer service throughout the state. As of 2012, the greatest switch of energy providers came not from residents but rather from businesses. This is believed to stem from a combination of lack of awareness on the part of consumers that they are able to switch providers, along with suppliers focusing the bulk of their attention on acquiring corporate customers.
New Jersey
- Electricity: yes
- Gas: yes
In New Jersey, deregulated electricity is available through Electricity Distribution Companies or third-party suppliers in the state, according to its Board of Public Utilities. This began in 1999 and now both natural gas and electricity are components of the Electric Discount and Energy Competition Act (EDECA), a program for residents, not just businesses. Much of the New Jersey system has been modeled off of other states that deregulated before them and they have made modifications over time, careful to avoid common pitfalls and to make a mark on how the power to choose works in their state. Rate and quantity of electricity usage can change the nature of pricing in New Jersey as well.
New York
- Electricity: yes
- Gas: yes
In New York, the passage of deregulation law occurred in 1998, with the introduction of natural gas customer choice programs. It had taken New York some time to deregulate as complaints about the power grid and energy pricing from as early as the 1960s had forced the state to consider other options. Improvements to the infrastructure and the change to energy provider selection have brought about some improvements, though there are some important things to identify. While the United States General Accounting Office explored the status of gas and electricity, it noted that only about four percent of residential customers who were eligible chose to participate in those programs.
Ohio
- Electricity: yes
- Gas: yes
The law that deregulated energy in Ohio began in 1997 when the Public Utilities Commission of Ohio (PUCO) started unbundling natural gas services. That separation led to the distinction between the cost of natural gas delivery and the actual gas cost. In 2001, consumers within Ohio were able to compare electricity providers in order to select a utility company and plan for receiving energy. The move to deregulation has allowed the residents within the state of Ohio to pay lower prices and in the second quarter of 2014, it was found that nearly 60% of consumers were switching from the monopolistic Investor-Owned Utilities.
Oregon
- Electricity: yes
- Gas: no
In 1999, Oregon passed Senate Bill 1149, which began with an electricity restructuring bill that provided consumer protections that many deregulation plans do not. This was because Oregon’s deregulation came on the heels of California’s, which for a time had done more to hinder the state than to help it. Oregon’s bill also addressed electricity conservation in a bid to reduce consumers’ demand for power. SB 1149 also allows consumers to have some options when it comes to buying energy, such as purchasing renewable sources. Even commercial consumers are given choice, enabling them to tap into desirable rates.
Pennsylvania
- Electricity: yes
- Gas: yes
Pennsylvania is another state that takes its electricity deregulation seriously, with a website that addresses consumer choice and involves comparison shopping tools for all 11 electric distribution companies in the state. In deregulating, the state had hoped that electricity rates would drop for consumers, as Pennsylvanians paid over $10 billion for electricity each year. As of January 2000, the residents of Pennsylvania were all able to access available electricity suppliers. To monitor and regulate the energy within the state, there are bodies meant to oversee its sale and usage, protecting consumers and aiding in keeping rates down.
Rhode Island
- Electricity: yes
- Gas: yes, with limitations
For Rhode Island, deregulation came with the Rhode Island Utility Restructuring Act, which created a place for non-regulated service companies to carve out a position in the market. The state offers consumer choice programs for both electricity and natural gas, but natural gas choice programs have restrictions. Only commercial or industrial customers can obtain natural gas from a supplier other than the regulated supplier that Rhode Island approves. Savings for those consumers who are able to switch their energy supplier are believed to be as great as 30%.
Virginia
- Electricity: yes, with limitations
- Gas: yes, with limitations
While program limitations apply, Virginia does maintain power choices for electricity and natural gas. For customers whose annual electricity use exceeds five megawatts, the option to shop for competitive electricity supply is available. Retail customers are also able to purchase from companies that have one-hundred percent of renewable sources if their own local company does not offer it. Commercial customers are given the option of locking into a fixed-rate plan or a variable one, allowing them to consume while optimizing for price.
Energy Deregulation Moving Forward
Updates to deregulated energy states guidelines and legislation can happen frequently, so it’s possible that deregulation may extend to your state sometime soon. Check back for updates on each state’s deregulated status so that you can find the most competitive energy rates possible no matter where you reside.
For more information on electricity across states or to find a provider that offers low energy rates, visit paylesspower.com. Offering cheap deregulated energy plans to suit both personal and business needs, Payless Power is a company committed to providing people not only with some of the best cheap electricity rates in Texas, but also with helpful customer service. Visit the website to learn more about how to save electricity at home, or connect with the online community on Facebook, Twitter, and Instagram.
