June 4, 2007—The Alliance for Retail Choice (ARC) has released a study showing that many states continue to make progress in adopting competitive retail electricity markets. New York and Texas were the clear leaders among states that have given customers the ability to choose their electricity supplier, according to the study.
According to the report, “The design of ‘default service’ . . . is the most significant factor that determines the success of retail choice. A poorly designed default service undermines retail competition.”
Retail electricity choice is thriving in Texas and New York because the electricity market structure in those states has advanced sufficiently for competitive markets to work effectively. Ten other states, including Massachusetts, Connecticut, Illinois, Maryland, and Pennsylvania, have been classified as achieving “medium progress.”
In Texas, which recently ended its five-year rate transition for residential consumers, residential consumers can choose from over 50 distinct products — a wide array of offers including electricity from wind energy, fixed-price products for multiple years, pricing that guarantees savings in extreme summer heat, and products that encourage energy efficiency.
In New York , 625,000 or 11% of residential consumers are purchasing their electricity from competitive suppliers, a growth of 55% in one year. In one utility service area, residential customers have a total of 37 electric rate offerings available from suppliers, green power providers, and the local utility. Offerings include fixed prices, indexed, blended, and green power. In aggregate, 41% of the total electricity usage in New York is currently provided by competitive suppliers.
The Alliance for Retail Choice advocates for continued development of retail energy markets that provide customers the opportunity to choose the products and services most consistent with their needs. The Alliance provides a focused voice for competitive energy retailers and their customers in selected public policy forums on the federal and state level.
ARC made its assessment with the assistance of representatives of eight state regulatory commissions. To view the complete report, see the Web site.
