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Blog Jun 12, 2018

The Deregulated Energy States

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When Texas, New Jersey, Pennsylvania and 13 other states deregulated their energy markets, local utility companies in those states were forced to sell their power generation plants. They held on to all their transmission and distribution assets and continue to maintain this infrastructure.

Energy Deregulation Information by State

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 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 deregulated 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

Alabama No No
Alaska No No
Arizona Yes No
Arkansas Yes No
California Yes Partial Choice
Connecticut Yes No
Colorado No No
Delaware Yes Partial Choice
Florida No Yes
Georgia No Yes
Hawaii No No
Idaho No No
Illinois Yes Yes
Indiana No Yes
Iowa No Yes
Kansas No No
Kentucky No No
Louisiana No No
Maine Yes No
Maryland Yes Yes
Massachusetts Yes Yes
Michigan Yes Yes
Minnesota No No
Mississippi No No
Missouri No Partial Choice
Montana Yes Yes
Nebraska No No
Nevada Yes Yes
New Hampshire Yes No
New Jersey Yes Yes
New Mexico Yes Yes
New York Yes Yes
North Carolina No No
North Dakota No No
Ohio Yes Yes
Oklahoma Yes No
Oregon Yes No
Pennsylvania Yes Yes
Rhode Island Yes Yes
South Carolina No No
South Dakota No No
Tennessee No No
Texas Yes Partial Choice
Utah No No
Vermont No No
Virginia Yes Yes
Washington No No
Washington DC Yes Yes
West Virginia No Yes
Wisconsin No No
Wyoming No Partial Choice

Energy Deregulation Information by State


  • Electricity: yes, but limited
  • Gas: yes

In the 1990s, both California and Texas began passing laws that allowed competition in the electricity industry. In 1996, the first California energy deregulation bill passed. But during the California energy crisis, the state suspended deregulation programs because it had invested bonds in power companies. Once the energy companies paid off the bonds, a choice would be available again.


  • Electricity: yes
  • Gas: yes, but partial and limited

Deregulated energy began in 1998 in Connecticut, with an act that helped establish a competitive market. The electric deregulation act forced companies to separate their “generation components” from the rest of their businesses, auctioning power plans and other generation assets.


  • Electricity: yes
  • Gas: no

The Delaware Public Service Commission explains that while electric deregulation and therefore customer choice is a priority, potential electric suppliers must apply for and receive certification from the state before offering service to consumers.


  • Electricity: yes
  • Gas: yes, with limitations

Georgia began natural gas deregulation in 1997, but it wasn’t a statewide adjustment. Only customers in Atlanta Gas Light’s Company’s service area have natural gas choice, leaving many consumers with no other option than to use utility providers that the state supports.


  • Electricity: yes
  • Gas: no

Deregulated energy in Texas began in 1999, breaking up the state’s public utility system. Before that legislation, a single provider administered energy and customers had no choices. The goal of electricity deregulation was lower rates, increased competition, and more consumer choice.


  • Electricity: yes
  • Gas: yes

Electric deregulation saved consumers money in Illinois- nearly 37 billion dollars over the past 16 years, according to one news outlet. The 1998 deregulation changed the way the state managed both electricity and natural gas, creating more competition and sparking new technology development.


  • 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, that does not mean that all Indiana residents have energy choice. Indiana still regulates electricity rates, regardless of jurisdiction.


  • 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. Competitive electric supply products factor in pricing, renewable energy content, and other products and services suppliers may offer.


  • Electricity: yes
  • Gas: yes

Maine used a Restructuring Act to take their electric utilities out of the generation business. However, Maine still regulates transmission and distribution utilities, keeping it from under the official “deregulation” umbrella.


  • Electricity: yes
  • Gas: yes

Maryland’s deregulated energy bill passed in 1999 with a bill that proceeded 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. Energy suppliers had to eliminate generation plants and procure power through the wholesale energy market.


  • 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.

New Hampshire

  • Electricity: yes
  • Gas: yes, with limitations

New Hampshire’s energy choice program started in 1998, although litigation slowed its progress in the beginning. While the state explains that most residential customers in restructured franchise areas use Default Energy Service, competitive suppliers do offer service throughout the state.

New Jersey

  • Electricity: yes
  • Gas: yes

De-regulated energy is available through Electricity Distribution Companies or third-party suppliers in New Jersey, according to its Board of Public Utilities. Both natural gas and electricity are components of the Electric Discount and Energy Competition Act (EDECA), a program for residents, not just businesses.

New York

  • Electricity: yes
  • Gas: yes

Energy deregulation in New York occurred in 1998, with the introduction of natural gas customer choice programs. While the United States General Accounting Office explored the status of gas energy deregulation, it noted that only about four percent of residential customers who were eligible chose to participate in those programs.


  • Electricity: yes
  • Gas: yes

Energy deregulation 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. Now, the PUCO runs a website dedicated to helping consumers find the energy solution that’s right for them. Energy Choice Ohio gives consumers “apples to apples” comparisons to find rate plans and providers.


  • Electricity: yes
  • Gas: no

Oregon’s energy deregulation began with an electricity restructuring bill, which provided consumer protections that many deregulation plans do not. The bill also addressed energy conservation in a bid to reduce consumers’ demand for power.


  • Electricity: yes
  • Gas: yes

Pennsylvania is another state that takes its energy deregulation seriously, with a website that addresses consumer choice and involves comparison shopping tools for all 11 electric distribution companies in the state.

Rhode Island

  • Electricity: yes
  • Gas: yes, with limitations

Rhode Island 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. However, all commercial customers can now use competitive gas supply service, whereas only larger users had access before.


  • Electricity: yes, with limitations
  • Gas: yes, with limitations

While program limitations apply, Virginia does maintain deregulated energy 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.

Energy Deregulation Stat Moving Forward

Updates to energy deregulation 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.

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