Residential electricity in the United States is different from commercial or industrial electricity for several reasons. Residential primarily refers to the home, the place where people all across the world live from day to day. In addition, residential electricity consumption tends to occur on a much smaller scale compared to businesses that require heavy duty appliances, machinery, or even lighting.
Electricity for Homes
There is a lot of information out there regarding electricity and residential customers. Over the years many organizations have conducted studies to determine the different ways in which these types of customers use energy throughout the United States. Some of this information includes,
- The average annual electricity consumption for residential customers reached 10,812 kWh (in 2015).
- In 2015, the state with the highest annual residential electricity consumption was, Louisiana at 15,435 kWh (per residential customer).
- The state with the lowest annual residential electricity consumption was, Hawaii (6,166 kWh per residential customer)
- In 2009, 41.5% of electricity consumption in homes went to heating, 34.6% to appliances, 17.7% to water heating and 6.2% to air conditioning.
- Most households can power appliances using between 3000 and 6500 watts.
- It is estimated that in 2014, Americans used 412 billion kWh of electricity for lighting.
- A single bulb can uses as much as $5000 worth of electricity during its lifetime.
- Turning off the power to appliances can reduce energy consumption in a home up to 75%.
- The average monthly residential energy consumption amount ranges from 531 kWh to 1,254 kWh.
Types of Residential Buildings
It’s sometimes easy to think of residential electricity in context of a single-family home. However, there are many different types of residential buildings in the United States, and so it’s important to understand how electricity can work for each.
Single-Family House: This type of residential building is very common in the United States. To own a house, it requires the purchase of the building plus some land around the property. That being said, it is also possible to be a tenant of the person who owns the home. When it comes to residential electricity for this type of building, every home is outfitted with a meter that is used to calculate or measure the amount of electricity consumed within the house. This information is used by the appropriate company to invoice the residential consumer.
Apartment: An apartment represents a unit within a larger building that is almost always leased or rented (month to month) instead of purchased. Apartment buildings themselves can come in many different shapes and sizes, from four-unit buildings, to skyscrapers with forty floors. Electricity for apartment dwellers is a little different because of how the consumption is separated between units. There are two ways an apartment building charges for electricity. The first is to put a meter in every unit. In this case, the tenant is required to deal with the utility and electricity provider themselves. The second is for the building to have one meter, or the units sub metered. In this situation, the tenant receives their bill from the building owner or manager.
Condominiums: Condo’s are a type of residential space that is a combination of house and apartment. They are spaces that can be purchased like a house, but are found within buildings that have many units, like an apartment. Tenants therefore own a share of the building. Condo’s are often managed by a Board of Directors and have to pay monthly fees to assist with maintenance and other associated costs. When it comes to residential electricity, units are set up in a similar way to apartments. They can either be submetered or individually metered.
Townhouse: A townhouse is similar to a condo as they can be purchased as a single or individual property. However, they are typically attached to each other, with a few communal spaces like a swimming pool or a community center. Residential electricity is metered for each individual townhouse. This means that the owner is responsible for his or her own energy consumption and bill. Alternatively, a townhouse can be rented out to a tenant and the owner can bill them for the electricity they use.
Mobile Homes: This type of residence is typically a large trailer that the tenant can live in and park somewhere for long periods of time. Trailer parks are common in many areas of North America. These spaces are available to mobile homeowners and can grow into large communities. Often, these areas have generators or outlets that can provide power to mobile homes. In some cases, the owner of the area will charge and invoice tenants for the electricity consumed. By law, they are not allowed to charge their tenants more than the total cost in order to make a profit.
Energy deregulation is the term used to describe the way the supply of energy is sold to energy consumers. In the United States, the push to switch over energy deregulation started in the 1990’s, after the price of electricity became quite expensive. While only certain areas have adopted this energy model, the change has helped to keep energy rates low and reasonable.
Why Energy Deregulation?
The reason why energy deregulation helps to keep prices fair for consumers is simple. Without energy deregulation, utilities have control over the majority of the process, from customer service to generation. Since there are only a few utilities offering energy services to many customers, monopolies often form from this type of relationship. In this case, it prevents competition from entering the market because customers don’t have other options. If they want electricity in their home, they must use the utility that offers services in their area.
In an energy deregulated market, the power shifts to the residential customer. This is achieved because utilities must allow other entities to sell services related to the supply of electricity. These entities are called, electricity providers (in some areas they are also known as electricity suppliers, and retail electric suppliers). When electricity providers open up shop, they compete for the same consumers as utilities. With more options, consumers can search and sign-up with the company that offers the best rates, services, plans and customer service. This becomes a huge incentive for electricity providers. In order to keep or even attract new customers, they must provide appealing services and rates to stay in business.
In the United States, there are currently several states that give residential consumers the option to choose their energy supplier. These states include:
- New Hampshire
- New York
- New Jersey
- Washington D.C.
It is important to remember that utilities are still a part of the industry, maintaining control over the delivery and maintenance of wires and poles. However, customers can switch to an electricity provider at any time (fees may apply depending on contract obligations), even if they’ve already switched providers before.
Residential Electricity Providers
When it comes to residential electricity, there are many providers that offer services all across the United States, while others remain within a specific location.
Some examples of residential electricity providers include,
- Direct Energy
- TriEagle Energy
- Bounce Energy
- Payless Power
- Amigo Energy
- Cirro Energy
- Green Mountain Energy
- Just Energy
- YEP Energy
- Gexa Energy
- First Choice Power
- Bounce Energy
- Ambit Energy
Residential Electricity By Deregulated State
All states across America offer its residents electricity or energy options for the home. Energy deregulated states however, can offer slightly different options under slightly different laws or regulations.
Texas has one of the largest pools of electricity providers in the United States. Despite this, it is important to remember that only 85% of the state is energy deregulated. The good news is residential consumers have different ways of determining whether or not they live in an area where they can choose their electricity provider. Aggregation tools are common and can be found quickly via the Internet. Residential customers can benefit from these types of tools because they will pool a list of plans and products specific to that type of customer. Contacting the Public Utility Commission of Texas is also a great way to find out information about different electricity suppliers.
In general, electricity supplier plans in Texas include fixed or variable rate, and are flexible when it comes to contract length and terms (month-to-month, 3, 6, 12 and 24 month, etc.). Products like smart thermostats or green energy technology are also offered to residential customers.
This state offers residential consumers energy choice for both electricity and natural gas. Plans are similar to industry standards, with flexible, fixed and variable rates. Ohio is very committed to making residential electricity available for all consumers. The Home Energy Assistance Program (EEP) is one of the ways in which residential consumers can access electricity at reasonable rates.
The residential electricity process in New Hampshire is very similar to Texas and Ohio. Customers have the option to choose their electricity provider. Electricity providers offer many standard contracts including,
- Green Energy
In Illinois, over 1.9 million residential consumers have switched electricity providers. Municipal and County Aggregation also allows for the negotiation of the purchase of the combined electric supply of residential and certain small businesses. The benefit of aggregation is that by bundling residential customers together into groups, they gain more buying power. This kind of power can provide significant savings to residential customers.
The state of Pennsylvania is another state that offers residential customers the option to choose their supplier for both electricity and gas. Some important things to note about residential customers living in Pennsylvania include the fact that the electricity households consume is 8% higher compared to the United States average. Residential consumers also pay 16% more than other households across America. The average electricity consumption is 10,402 kWh per year. This is lower than the United State average.
Residential electricity rates are also available in New York, as is the option to choose an electricity provider. According to Electricity Local, the average monthly electricity bill is $106, with an average rate of 17.62 cents per kWh. Residents in New York consume an average of 603 kWh per month.
Residential rates in New Jersey are very similar to other deregulated states (in terms of contract type). Customers can sign up for many different types of plans, and can switch to a provider at any time. Monthly electric consumption within a household in this state averages in at 601 kWh.
There are many cities within Delaware that offer residential customers energy choice including, Newark, Wilmington and Dover. Electric providers offer plans with low, fixed rates to help customers move away from the highs and low of variable pricing. In 2014, the average retail price for electricity reached, 11.22 cents per kWh.
Many electricity providers offer residential rates in Connecticut. The state also provides different tools for consumers to investigate their different electricity choices.
Oregon gets its electricity from many different sources including, hydro, natural gas, coal, nuclear, biomass, petroleum, solar, cogeneration and other sources. By 2025, the state aims to generate 25% of its energy from renewable resources. Residential electricity in this state is offered by providers with contracts that include variable, fixed and flexible pricing.
The state of Washington is not energy deregulated. However, District of Columbia residents have the option to choose their electricity provider. Residential customers use 21.6% of the area’s electricity. The District of Columbia also requires that 50% of its electricity needs to be generated from renewable resources (by 2032). This is one of the highest renewable portfolio standards in the United States.
Maryland offers electric choice to residential customers for both electricity and natural gas. When dealing with electricity providers in Maryland, residents need to make sure that the provider has obtained a PSC license. Residential also need to ensure that they understand the difference between a broker and a supplier. Suppliers sell the electricity or gas supply, while brokers act as ‘the middleman’. They can contact residential customers with supplier names, but cannot sell and do not electricity or gas.
In Massachusetts, residents use 109 million Btu of energy per home. This is 22% more than the United States average. This also means that the cost of residential energy is also 22% higher than the rest of America. One major difference between the residential customers in this state is that cool summers means that households rely less on electricity for heating. Many electricity providers in Massachusetts sell residential supply services that include flexible rates and plan options.
Maine’s Office of the Public Advocate provides residential electricity consumers with information about their supply options. Customers who decide to remain with their utility for supply services will only receive Standard Service. This encourages residential consumers to investigate their options, as suppliers can likely offer a better deal.
Residential energy consumers in Michigan rely less on heating and cooling, as their average temperatures are not extreme. Homes in this state are typically older than other homes elsewhere in the United States. This has an impact on the average energy used. Michigan homes use 38% more energy than other American states. Residential offers from electricity providers range from length, terms and rates. However, these elements are all based on current industry standards.