What is Deregulation?

Deregulation is the process whereby government removes regulations and laws that hinder free market competition in the supply of goods and services, thereby giving room for the economy to be dictated and driven by market forces.

Current State of Deregulated Electricity in the U.S.

Deregulation of the electricity sector in the United States is described as the process of dismantling vertically integrated utilities in to separate entities in charge of electricity generation, transmission, distribution, and commercialization. It began with the Energy Policy Act of 1992 which removed obstacles for wholesale competition. In practice, however, regulation has been unevenly introduced between states. It began in earnest only from 1996 onwards when the Federal Energy Regulatory Commission issued orders that required utilities to provide transmission services “on a reasonable and non-discriminatory basis”. In some states, such as in California, private utilities were required to sell some of their power plants to prevent concentration of market power.

List of States with Deregulated Electricity

As of April 2014, 16 states in the United States of America (as well as Washington D.C.) deregulated their electrical sector and these states are listed below:

  • Connecticut

  • Delaware

  • Illinois

  • Maine

  • Maryland

  • Massachusetts

  • Michigan

  • Montana

  • New Hampshire

  • New Jersey

  • New York

  • Ohio

  • Oregon

  • Pennsylvania

  • Rhode Island

  • Texas

  • *District of Columbia

List of States that have Suspended Deregulation

Additionally, seven states started electricity deregulation in some capacity but have since suspended the program:

  • Arizona

  • Arkansas

  • California

  • Nevada

  • New Mexico

  • Virginia

  • Wyoming

List of Regulated Electricity Markets by State

The remaining states do not have deregulated electricity markets.

  • Alabama

  • Alaska

  • Colorado

  • Florida

  • Georgia

  • Hawaii

  • Idaho

  • Indiana

  • Iowa

  • Kansas

  • Kentucky

  • Louisiana

  • Minnesota

  • Mississippi

  • Missouri

  • Nebraska

  • North Carolina

  • North Dakota

  • Oklahoma

  • South Carolina

  • South Dakota

  • Tennessee

  • Utah

  • Vermont

  • Washington (state)

  • West Virginia

  • Wisconsin