Electricity Deregulation
- 18 U.S. states have deregulated electricity, separating generation from delivery.
- Consumers choose a retail provider for supply; the local utility still delivers power and handles outages.
- Texas, Ohio, and Pennsylvania lead in switching, with over 19 million households on competitive plans.
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State-by-State Deregulation Data
All 19 U.S. jurisdictions with some form of retail electricity choice, ranked by residential switching rate.
| State | Market Access | Year Opened | Residential Switching | Households Switched |
|---|---|---|---|---|
| Texas | Full choice | 2002 | 87% | 10.5 million |
| Massachusetts | Full choice | 1998 | 76% | 1.9 million |
| Ohio | Full choice | 1999 | 57% | 2.6 million |
| New Hampshire | Full choice | 1996 | 44% | 286,000 |
| Rhode Island | Full choice | 1997 | 29% | 132,000 |
| Illinois | Full choice | 1997 | 24% | 1.14 million |
| Pennsylvania | Full choice | 1997 | 21% | 1.1 million |
| Connecticut | Full choice | 1998 | 15% | 221,000 |
| New York | Full choice | 1996 | 9% | 647,000 |
| Washington D.C. | Full choice | 2001 | 9% | 30,365 |
| Delaware | Full choice | 1999 | 9% | 27,000 |
| Maine | Full choice | 2000 | 8% | 60,000 |
| New Jersey | Full choice | 1999 | 6% | 236,000 |
| Maryland | Full choice | 1999 | Less than 1% | 2,239 |
| Michigan | Capped at 10% | 2000 | Less than 1% | 5,517 |
| Virginia | Limited (expanding) | 1999 | Less than 1% | 17,000 |
| Oregon | C&I only | 2002 | Not available | 62 C&I (12% of load) |
| California | Residential suspended | 1998 | Suspended since 2001 | C&I waitlisted |
| Nevada | C&I only | 2001 | Not available | Fewer than 10 |
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. With 140+ licensed REPs and over 170 competitive retailers, the market is intensely competitive.
Key utilities: Oncor, CenterPoint, AEP Texas, TNMP
Natural gas: Partial choice in some utility territories.
Switching: 87% res / 87% C&I · Switched: 10.5M homes · Since: 2002
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. About 90 active CRES providers (110 certified) compete in the market.
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.
Switching: 57% res / 65% C&I · Switched: 2.6M homes · Since: 1999
See Ohio electricity rates →Pennsylvania was among the first states to restructure (1997). The PA Power Switch comparison tool and 50+ 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.
Switching: 21% res / 40% commercial / 79% industrial · Switched: 1.1M homes · Since: 1997
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.
Switching: 24% res (ComEd+Ameren combined) · Switched: 1.14M homes · Since: 1997
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 a 28% residential switching rate.
Natural gas: Full residential and commercial choice available.
Switching: 44% res (incl. Community Power) · Switched: 286K homes · Since: 1996
See New Hampshire electricity rates →Massachusetts restructured in 1998. Municipal aggregation programs are expanding across the state, particularly in National Grid and Eversource territories. The 22% residential switching rate is growing as more communities adopt aggregation.
Natural gas: Full residential and commercial choice available.
Switching: 76% res (55% aggregation + 21% individual) · Switched: 1.9M homes · Since: 1998
See Massachusetts electricity rates →Rhode Island restructured in 1997. The state is served by Rhode Island Energy (formerly Narragansett Electric). Commercial switching is stronger than residential, with a 40% C&I rate vs. 20% residential.
Natural gas: Full residential and commercial choice available.
Switching: 29% res (incl. aggregation) · Switched: 132K homes · Since: 1997
See Rhode Island electricity rates →Connecticut restructured in 1998. The market is divided between Eversource (~14.2% residential switching) and United Illuminating (~15.5%) as of December 2025. The C&I market is significantly more active at 38%.
Natural gas: Full residential and commercial choice available.
Switching: 15% res · Switched: 221K homes · Since: 1998
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.
Switching: <1% res · Switched: 2,239 homes · Since: 1999
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 notably strong at 35%.
Natural gas: Full residential and commercial choice available.
Switching: 6% res · Switched: 236K homes · Since: 1999
See New Jersey electricity rates →New York began retail access in 1996. The ESCO market is under active Public Service Commission oversight, with restrictions on residential ESCO marketing. Municipal electric CCA programs ended statewide by December 2025. 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.
Switching: 9% res · Switched: 647K homes · Since: 1996
See New York electricity rates →Washington D.C. opened retail access in 2001. The district is served entirely by Pepco with an active commercial market within PJM. The C&I switching rate (48%) is among the highest in the country.
Natural gas: Full residential and commercial choice available.
Switching: 9% res · Switched: 30K homes · Since: 2001
See D.C. electricity rates →Maine restructured 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: Full residential and commercial choice available.
Switching: 8% res · Switched: 60K homes · Since: 2000
See Maine electricity rates →Delaware restructured in 1999. The state is served by Delmarva Power. Residential participation is lower than neighboring PJM states at 8%, though the C&I market is more active.
Natural gas: Full residential and commercial choice available.
Switching: 9% res · Switched: 27K homes · Since: 1999
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 5,100+ customers on the waitlist. Over 20 licensed AES participate.
Key utilities: DTE Energy, Consumers Energy
Natural gas: Full residential and commercial choice — more open than the capped electric market.
Switching: <1% res / ~10% C&I · Switched: 5,517 total · Since: 2000
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 millions of customers under different regulatory rules.
Key utilities: PG&E, Southern California Edison, SDG&E
Natural gas: Limited choice for large commercial and industrial customers.
Access: Res. suspended / C&I capped · CCA programs: 25+ · Since: 1998
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.
Switching: <1% res / <3% C&I · Switched: ~17K total · Since: 1999
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. Only 62 large C&I customers participate, but they account for 12% of C&I load (2.97 million MWh).
Natural gas: Limited choice for large customers.
Switching: C&I only (62 customers, 12% of load) · Since: 2002
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. Exit fees and import-capacity constraints have kept participation to a handful of large casino and resort operators. No new exit applications were filed in 2025 or 2026.
Natural gas: Limited choice for large customers.
Switching: C&I only (fewer than 10 participants) · Since: 2001
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 and switch plans can save 10–20% on the supply portion of their bill. 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 competitive market has kept supply rates below the national average for most of the past decade. In Ohio, government aggregation programs have driven residential switching to 57%. 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 millions of 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 5,100+ customers on the waitlist.
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
At least 16 states plus D.C. have some form of natural gas choice. States with full residential and commercial gas choice include:
- Ohio, New York, Pennsylvania, New Jersey
- Maryland, Illinois, Connecticut, Massachusetts
- Rhode Island, Delaware, New Hampshire, Maine
- 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. This makes Georgia the only state where you can choose your gas supplier but not your electricity provider.
Gas vs. Electric Deregulation Gaps
Michigan also has more open gas choice than electric — while electricity is capped at 10%, natural gas choice is available to all residential and commercial customers. 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 serving ~67,000 GWh of annual load, 15 million customers
- 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 57%
- New York — previously had 100+ CCA communities; all programs ended by December 2025. 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?
18 states plus Washington D.C. have some form of retail electricity choice, 19 jurisdictions in total. The degree of access varies widely. Texas has a fully competitive mandatory-choice market with 87% switching. Ohio's government aggregation programs have pushed residential switching to 57%.
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. Customers who compare and switch plans typically pay 10–20% less on the supply portion of their bill.
In Texas, the competitive market has kept supply rates below the national average for much of the past decade. 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.
