Electricity deregulation is a relatively new phenomenon, although the idea of unregulated electricity is far from new.
When electricity utilities were just getting started, there were often multiple providers directly competing in urban areas. Over the years the redundant systems in a city were purchased by one company and consolidated into a single electric utility that provided service for all residents.
At first it seemed like a good idea since it brought all the infrastructure together and made regulating electric utilities much easier. However, by the 1980s utility companies were habitually raising rates and customers were bearing the increasing cost as best they could. Talk of deregulating both gas and electricity utilities started shortly thereafter, but little progress was made into restructuring until the 1990s. Both electricity and natural gas deregulation is now commonplace in the United States.
What States Have Residential Electricity and Natural Gas Deregulation?
Slightly over half of the states in the United States are currently involved in some sort of energy deregulation.
New to deregulation? See What is deregulation? for an overview.
The western states of Montana and New Mexico led the way with natural gas deregulation in the 1980s, but the deregulation boom in the 1990s and early 2000s added a number of additional states to that list. Some states have deregulated natural gas only, others electricity only and others have chosen to open both markets. A few such as Nevada are considering deregulation as a potential future move.
This is how the states currently break down on the issue of deregulation for residential customers:
Residential: Electricity Only
Residential: Both Electricity and Natural Gas
- New Jersey
- New York
- Rhode Island
- Washington, DC
Residential: Natural Gas Only
- New Mexico
- South Dakota
- West Virginia
Note that deregulation for commercial customers differs from this list and varies widely. We will provide an updated commercial list in a future post.
Even if a state is listed as having natural gas or electricity deregulation, you may not have it available to you. Often, this option is only available in specific areas served by investor-owned utilities or energy choice is limited to business customers only.
Is My Area Deregulated?
It’s easy to figure out if your local area is deregulated. You can use ElectricityPlans.com to look up the electricity plans available to your zip code in deregulated states served by this site. If none are listed, you’ll likely have to stick with your local utility, at least for now. This is because you may live in an area that is served by a local utility co-op or municipality. These type of utilities are exempt from deregulation even in a deregulated state.
In Ohio, for instance, you may live in an area that participates in government aggregation. This is where communities have formed buying groups on behalf of their citizens to purchase electricity or natural gas or both. If you live in an area that has government aggregation, you have the opportunity to opt-out if you think you can find a better electricity rate from another provider.
Deregulation is well-liked by many electricity customers, so if your area isn’t deregulated you can push the issue by writing to your state-level representatives. Ask them to investigate the benefits of bringing electricity choice and competition to your area. Because of the differing deregulation structures between the states, deregulation can work beautifully in some states and be hard to understand in others. However, if you have an opportunity to choose your own electricity plan, you’ll want to grab your electricity bill and use it to compare electricity plans to see exactly how you’ll benefit. There’s a very good chance that shopping around for a new electricity plan can save you money.
ElectricityPlans.com is set up for customers like you who are trying to learn more about the process of switching to a new electricity provider and want a safe, free, transparent tool to help them determine the electricity plans that are ideal for their lifestyles, households, and businesses.