Electricity Deregulation
- 19 U.S. states plus D.C. have some form of retail electricity choice, separating generation from delivery.
- Consumers choose a retail provider for supply; the local utility still delivers power and handles outages.
- About 21.7 million households buy electricity from a competitive supplier or community choice program (EIA Form 861, 2025).
Check electric rates in your area
State-by-State Deregulation Data
All 20 U.S. jurisdictions with some form of retail electricity choice, ranked by the share of homes buying from a competitive supplier. Each figure links to the regulator or federal report it comes from.
| State | Market Access | Year Opened | Homes on Competitive Supply | Households | Source |
|---|---|---|---|---|---|
| Massachusetts | Full choice | 1998 | 75.8%* | 1,925,422 | Mass. DOER, Jun 2026 |
| Ohio | Full choice | 2001 | 67.4%* | 2,989,485 | EIA Form 861, 2025 |
| Texas | Full choice | 2002 | 55.1%* | 7,054,497 | EIA Form 861, 2025 |
| New Hampshire | Full choice | 1998 | 37.1%* | 266,024 | EIA Form 861, 2025 |
| Rhode Island | Full choice | 1998 | 27.4% | 125,700 | RI PUC, Sep 2026 |
| Illinois | Full choice | 2002 | 24.0%* | 1,152,941 | Illinois Commerce Commission, Aug 2026 |
| Pennsylvania | Full choice | 1999 | 21.0% | 1,111,411 | PA PUC, Sep 2026 |
| Connecticut | Full choice | 2000 | 16.7% | 252,209 | EIA Form 861, 2025 |
| Washington D.C. | Full choice | 2002 | 10.2% | 33,247 | EIA Form 861, 2025 |
| Delaware | Full choice | 1999 | 8.8% | 27,056 | Delaware PSC, Jul 2026 |
| New York | Full choice | 1998 | 8.6%* | 539,720 | EIA Form 861, 2025 |
| Maine | Full choice | 2000 | 8.4% | 70,134 | Maine PUC, Aug 2026 |
| New Jersey | Full choice | 1999 | 6.4%* | 234,656 | NJ BPU, Sep 2026 |
| Maryland | Full choice | 2000 | 0.09% | 2,239 | Maryland PSC, Aug 2026 |
| California | Residential suspended | 1998 | 52.2%* | 5,776,231 | EIA Form 861, 2025 |
| Michigan | Limited | 2000 | 0.0% | 13 | EIA Form 861, 2025 |
| Virginia | Limited | 2002 | 0.0% | 0 | EIA Form 861, 2025 |
| Oregon | Limited | 2002 | 0.0% | 0 | EIA Form 861, 2025 |
| Nevada | Limited | — | 0.0% | 0 | EIA Form 861, 2025 |
| Montana | Limited | — | 0.0% | 2 | EIA Form 861, 2025 |
- * Massachusetts: 1,385,858 homes in town aggregation programs and 539,564 who chose a supplier themselves.
- * Ohio: PUCO measures shopping as a share of sales instead: 64% to 81% of residential sales by utility in 2025.
- * Texas: Share of all Texas homes buying from a retail electric provider. Inside ERCOT's competitive area every home has one; the rest are served by co-ops, city utilities or utilities outside ERCOT.
- * New Hampshire: Includes community power programs.
- * Illinois: ComEd and Ameren Illinois territories.
- * New York: Includes municipal community choice aggregation.
- * New Jersey: Includes 64,044 homes in government energy aggregation.
- * California: Community choice aggregation. Residential direct access has been closed to new customers since 2001.
State-by-State Deregulation Profiles
Expand any state below for market details, key utilities, and current switching data.
Texas operates the largest competitive electricity market in the U.S. Since 2002, residents and businesses in ERCOT territory must choose a retail electricity provider — there is no default utility supply. The PUCT lists 144 certificated retail electric providers (November 2026).
Key utilities: Oncor, CenterPoint, AEP Texas, TNMP
Natural gas: No residential gas choice program (EIA).
Residential: 55.1% (7,054,497 homes) · Business: 54.4% · Since: 2002 · Source: EIA Form 861, 2025
See Texas electricity rates →Ohio deregulated in 1999 and has one of the highest residential switching rates in the country, driven largely by government aggregation programs that automatically enroll residents. PUCO counted 110 certified CRES providers at the end of 2025, 88 of them with sales.
Key utilities: AEP Ohio, Duke Energy Ohio, FirstEnergy (Ohio Edison, Toledo Edison, The Illuminating Company), AES Ohio
Natural gas: Full residential and commercial choice available.
Residential: 67.4% (2,989,485 homes) · Business: 67.0% · Since: 2001 · Source: EIA Form 861, 2025
See Ohio electricity rates →Pennsylvania was among the first states to restructure (1996 law; choice opened in 1999). The PA Power Switch comparison tool and 444 licensed suppliers give consumers real options. Switching rates vary by utility territory — PPL has the highest participation at 31%.
Key utilities: PECO, PPL, Duquesne Light, Penn Power, Penelec
Natural gas: Full residential and commercial choice available.
Residential: 21.0% (1,111,411 homes) · Business: 39.8% · Since: 1999 · Source: PA PUC, Sep 2026
See Pennsylvania electricity rates →Illinois restructured in 1997. Municipal aggregation programs in ComEd and Ameren territories are the primary driver of residential switching. The Illinois Commerce Commission (ICC) oversees the competitive market.
Key utilities: ComEd (Exelon), Ameren Illinois
Natural gas: Full residential and commercial choice available.
Residential: 24.0% (1,152,941 homes) · Business: 42.4% · Since: 2002 · Source: Illinois Commerce Commission, Aug 2026
See Illinois electricity rates →New Hampshire was the first state to pass electricity restructuring legislation (HB 1392, 1996). The market is served by Eversource, Unitil, and Liberty Utilities, with 37% of homes on a competitive supplier or community power.
Natural gas: No residential gas choice program (EIA).
Residential: 37.1% (266,024 homes) · Business: 54.1% · Since: 1998 · Source: EIA Form 861, 2025
See New Hampshire electricity rates →Massachusetts restructured in 1997 (choice opened in 1998). Municipal aggregation programs are expanding across the state, particularly in National Grid and Eversource territories. About 21% of homes chose a supplier themselves and about 55% are in town aggregation programs.
Natural gas: Full residential and commercial choice available.
Residential: 75.8% (1,925,422 homes) · Business: 80.5% · Since: 1998 · Source: Mass. DOER, Jun 2026
See Massachusetts electricity rates →Rhode Island restructured in 1996. The state is served by Rhode Island Energy (formerly Narragansett Electric). About 27% of homes and 27% of businesses buy from a competitive supplier.
Natural gas: Full residential and commercial choice available.
Residential: 27.4% (125,700 homes) · Business: 27.2% · Since: 1998 · Source: RI PUC, Sep 2026
See Rhode Island electricity rates →Connecticut restructured in 1998. The market is divided between Eversource (16.6% residential switching) and United Illuminating (17.1%) in 2025 (EIA). The C&I market is more active at 37%.
Natural gas: Limited residential gas choice (EIA).
Residential: 16.7% (252,209 homes) · Business: 37.4% · Since: 2000 · Source: EIA Form 861, 2025
See Connecticut electricity rates →Maryland restructured in 1999. Three major utility territories — BGE, Pepco, and Delmarva Power — all support retail choice. The state participates in the PJM wholesale market.
Natural gas: Full residential and commercial choice available.
Residential: 0.09% (2,239 homes) · Business: 32.6% · Since: 2000 · Source: Maryland PSC, Aug 2026
See Maryland electricity rates →New Jersey restructured in 1999. All major utility territories — PSE&G, JCP&L, and Atlantic City Electric — are open to competition within the PJM market. C&I switching is 21.6% of accounts.
Natural gas: Full residential and commercial choice available.
Residential: 6.4% (234,656 homes) · Business: 21.6% · Since: 1999 · Source: NJ BPU, Sep 2026
See New Jersey electricity rates →New York ordered retail access in 1996 (PSC Opinion 96-12), and it began in 1998. The ESCO market is under active Public Service Commission oversight, with restrictions on residential ESCO marketing. Only one municipal electric CCA program was still active in November 2026. DPS staff formally recommended discontinuing the CCA framework in August 2026, finding that CCA customers paid an average of 16.4% more than utility default supply.
Key utilities: National Grid, Con Edison, NYSEG, Central Hudson
Natural gas: Full residential and commercial choice available.
Residential: 8.6% (539,720 homes) · Business: 23.8% · Since: 1998 · Source: EIA Form 861, 2025
See New York electricity rates →Washington D.C.'s retail choice law took effect in 2000. The district is served entirely by Pepco with an active commercial market within PJM. About 33% of business customers buy from a competitive supplier.
Natural gas: Full residential and commercial choice available.
Residential: 10.2% (33,247 homes) · Business: 32.9% · Since: 2002 · Source: EIA Form 861, 2025
See D.C. electricity rates →Maine restructured in 1997 (choice opened in 2000) and required utilities to fully divest generation assets. The standard offer is competitively bid. Central Maine Power (CMP) and Versant Power are the two transmission and distribution utilities.
Natural gas: No residential gas choice program (EIA).
Residential: 8.4% (70,134 homes) · Business: 55.1% · Since: 2000 · Source: Maine PUC, Aug 2026
See Maine electricity rates →Delaware restructured in 1999. The state is served by Delmarva Power. Residential participation is 8.8%, while the C&I market is more active at 29.9%.
Natural gas: No residential gas choice program (EIA).
Residential: 8.8% (27,056 homes) · Business: 29.9% · Since: 1999 · Source: Delaware PSC, Jul 2026
See Delaware electricity rates →Michigan passed the Customer Choice and Electricity Reliability Act in 2000 but capped competitive supply at 10% of each utility's retail sales in 2008. The electric choice program is fully subscribed, with 5,517 customers enrolled and 5,101 on the waitlist at the end of 2025. The MPSC lists 20 licensed AES.
Key utilities: DTE Energy, Consumers Energy
Natural gas: Gas choice for residential and business customers of four of the seven regulated gas utilities — more open than the capped electric market.
Residential: 0.0% (13 homes) · Business: 0.9% · Since: 2000 · Source: EIA Form 861, 2025
See Michigan electricity rates →California opened its market in 1998 but suspended residential direct access in 2001 after the energy crisis. C&I customers can participate under a statewide cap (~28,800 GWh) with a long waitlist. Separately, 25 Community Choice Aggregation programs serve load under different regulatory rules.
Key utilities: PG&E, Southern California Edison, SDG&E
Natural gas: Residential gas choice available (EIA).
Access: Res. direct access suspended / C&I capped · CCA programs: 25 · Residential: 52.2% (5,776,231 homes) · Business: 49.5% · Since: 1998 · Source: EIA Form 861, 2025
See California electricity rates →Virginia passed restructuring in 1999 and briefly allowed switching through a 100% renewable energy exception. The SCC approved Dominion's own renewable tariff in 2020, closing that loophole. In July 2026, HB 921 removed the 1% peak-load cap, allowing any nonresidential customer above 5 MW to shop for competitive supply.
Natural gas: Full residential and commercial choice — significantly more open than the electric market.
Residential: 0.0% · Business: 0.1% · Since: 2002 · Source: EIA Form 861, 2025
See Virginia electricity rates →Oregon allows commercial and industrial customers to choose their electricity supplier through structured annual enrollment windows with PGE and Pacific Power. Residential choice is not available. In 2025, 746 commercial and industrial accounts used direct access (EIA).
Natural gas: Limited choice for large customers.
Residential: 0.0% · Business: 0.4% · Since: 2002 · Source: EIA Form 861, 2025
See Oregon electricity rates →Nevada allows limited competitive supply for large C&I customers (1 MW+) on an application basis through the 704B process. NV Energy is the dominant utility. In 2025, 212 commercial and industrial accounts bought from alternative providers (EIA).
Natural gas: Limited choice for large customers.
Residential: 0.0% · Business: 0.1% · Source: EIA Form 861, 2025
See Nevada electricity rates →What Is Electricity Deregulation?
Deregulation separates the electricity supply from the delivery infrastructure. The utility keeps the wires, but competing companies can sell electricity over them. You still get one bill — only the supply portion changes.
How Does Switching Work?
In most deregulated states, switching takes minutes and causes no service interruption:
In states with municipal aggregation (Ohio, Illinois, Massachusetts), customers may be enrolled automatically through an opt-out community program.
Does Deregulation Save Money?
Deregulation doesn’t guarantee lower prices, but it introduces competition. This historically drives down supply costs in active markets. Commercial and industrial customers tend to benefit most because they consume enough electricity to negotiate favorable contracts.
Residential Savings
Residential customers who actively compare plans can lower the supply portion of their bill, but only if the offer beats the utility's default rate. Passive customers who remain on default rates may see little difference.
The Engagement Factor
The key factor is engagement. In Texas, where shopping is essentially mandatory, the average residential price was 97.5% of the national average in 2024 (PUCT). In Ohio, government aggregation programs have driven residential switching to 67%. Suppliers must offer value to retain customers.
In states with low switching rates, fewer suppliers compete and the savings potential is more modest.
Why Some States Have Restricted Markets
Not every state that passed deregulation legislation followed through with full implementation. Several markets were scaled back or restricted after initial problems.
California — Residential Suspended Since 2001
California suspended residential direct access in 2001 after market manipulation and supply shortages triggered an energy crisis. Commercial and industrial customers can still participate, but under a cap (~28,800 GWh statewide) with a long waitlist. Separately, 25 CCA programs now serve California customers under different regulatory rules.
Michigan — 10% Cap, Fully Subscribed
Michigan passed its Customer Choice Act in 2000 but capped competitive supply at 10% of each utility’s retail sales in 2008. The program has been fully subscribed since 2009, with 5,517 participants (nearly all C&I) and 5,101 customers on the waitlist at the end of 2025.
Virginia — Expanded in 2026
Virginia allowed switching through a 100% renewable energy exception. The SCC approved Dominion’s own renewable tariff in 2020, closing that loophole. In July 2026, HB 921 removed the 1% cap; any nonresidential >5 MW customer is now eligible.
Oregon & Nevada — C&I Only
Oregon and Nevada limit choice to commercial and industrial customers, with Oregon using structured annual enrollment windows through PGE and Pacific Power.
Timeline of U.S. Electricity Deregulation
The path to competitive electricity markets began in the mid-1990s and has unfolded over three decades, with major expansions, setbacks, and ongoing policy shifts.
Natural Gas Deregulation
Many of the same states that deregulated electricity also allow consumers to choose their natural gas supplier. In deregulated gas markets, you pick the company that procures the gas. The local utility continues to deliver it through its pipeline network, the same model as electricity deregulation.
States With Natural Gas Choice
22 states plus D.C. had residential natural gas choice programs in 2024 (EIA). Among the states with electricity choice, residential gas choice is available in:
- Ohio, New York, Pennsylvania, New Jersey
- Maryland, Illinois, Massachusetts, and on a limited basis Connecticut
- Rhode Island, Michigan, California, Montana
- Virginia and Washington D.C.
Georgia is a notable exception — it has full residential natural gas choice (since 1998, in the Atlanta Gas Light territory) but remains fully regulated for electricity.
Gas vs. Electric Deregulation Gaps
Michigan also has more open gas choice than electric — while electricity is capped at 10%, natural gas choice is open to residential and business customers of four of the state's seven regulated gas utilities. Virginia follows a similar pattern, with full gas choice and only limited electric choice (expanded for >5 MW commercial customers in July 2026).
Community Choice Aggregation (CCA)
CCA programs represent a growing form of electricity choice that doesn’t fit neatly into the “deregulated vs. regulated” framework. Under CCA, a local government aggregates the buying power of residents and businesses to procure electricity supply from competitive providers, often with higher renewable energy content.
Where CCA Is Active
- California — 25 programs with about 69,600 GWh of forecast 2026 load (CPUC)
- Massachusetts — expanding municipal aggregation across the state
- Illinois — primary driver of residential switching in ComEd and Ameren territories
- Ohio — government aggregation has pushed residential switching to 67%
- New York — previously had 100+ CCA communities; one active program remained in November 2026. DPS staff formally recommended discontinuance in August 2026
How CCA Works
In Ohio and Illinois, CCA programs are the primary driver of residential switching. Customers are enrolled automatically on an opt-out basis. CCA customers keep their existing utility for delivery and billing. Only the supply source changes.
Frequently Asked Questions
What does electricity deregulation mean?
Electricity deregulation means the state allows consumers to choose their electricity supplier instead of being limited to the local utility monopoly. The utility still delivers the power over its wires, but you pick the company that generates or procures the electricity and sets the supply rate on your bill.
How many states have deregulated electricity?
19 states plus Washington D.C. have some form of retail electricity choice, 20 jurisdictions in total. The degree of access varies widely. Texas has a mandatory-choice market: in its competitive area every home buys from a retail provider. Ohio's government aggregation programs have pushed residential switching to 67%.
On the other end, Michigan caps participation at 10% of retail sales. Virginia expanded commercial access in July 2026 (HB 921 removed the 1% cap for nonresidential >5 MW customers). California suspended residential direct access entirely in 2001.
Does deregulation lower electricity prices?
Deregulation introduces competition, which can lower prices. This is especially true for commercial and industrial customers who actively shop and negotiate. Residential savings depend on engagement and on the offer: compare a supplier's price with the utility's default rate before switching.
In Texas, the average residential price was 97.5% of the national average in 2024 (PUCT). In Ohio, aggregation programs have created strong pressure on suppliers. However, passive customers who stay on default utility rates may see little difference.
Can I choose my electricity provider?
If your state is deregulated and your area is served by a participating utility, yes. Enter your ZIP code on ElectricChoice to see available plans and providers. Some states only allow commercial and industrial customers to choose (Oregon, California, Nevada).
Michigan imposes a 10% cap that's fully subscribed with a long waitlist. Virginia expanded commercial access in July 2026 (HB 921 removed the 1% cap for nonresidential >5 MW customers).
Will I lose power when I switch providers?
No. Switching electricity suppliers does not cause any interruption in service. The local utility continues to deliver power over the same wires. The only thing that changes is the supply portion of your bill — it comes from your chosen provider instead of the utility's default supply. The transition typically takes 1–2 billing cycles.
What is the difference between a utility and an electricity supplier?
A utility owns and maintains the physical infrastructure: the power lines, transformers, and meters that deliver electricity to your home. A supplier (also called a retail electricity provider, ESCO, or CRES) generates or procures the electricity that flows over those wires.
In deregulated markets, you choose your supplier while the utility continues to handle delivery and billing. See our guide to supply vs. delivery rates for more detail.
