Retail Electricity Markets.
Retail Electricity Markets
Retail electricity markets can vary significantly from one location to the next, and even within a state or province. In some places, retail competition is limited to only certain segments of the market, such as large commercial and industrial customers. Elsewhere, retail competition is open to all end-use consumers. In retail markets, there are energy suppliers who purchase and resell energy and energy brokers who advise customers and help them shop supplier rates.
What Are The Benefits?
The benefits of retail choice are well documented. A 2016 study by the free-market think tank The Heartland Institute found that when given a choice, consumers saved an average of 12% on their electric bills. And research conducted by Navigant Consulting in 2017 found that states with retail choice saw $11 billion in savings between 2009 and 2015 thanks to lower wholesale power prices.
Why Aren’t All States Deregulated?
The main reason for this lack of retail choice is the political influence of incumbent utilities. These utilities often enjoy a monopoly or duopoly in their service areas, and they don’t want to see that change. They use their lobbying power and financial resources to try to block or delay retail choice initiatives at the state level.
But as more and more people demand access to retail choice, it’s becoming harder for utilities to hold on to their monopolies. In 2010, Pennsylvania became the latest state to enact legislation that will open retail electricity markets to retail competition.