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Can electric utility customers choose their electricity supplier?
Some electric utility customers have the option to choose an alternate electricity supplier in states where the electric utility industry has been restructured. This consumer option is often called retail choice or customer choice. The alternate supplier is the company that generates or markets electricity, often referred to as a retail electricity marketer. The alternate supplier may be an affiliate of the distribution utility. Some suppliers offer electricity generated from specific energy sources, such as wind and other renewable energy sources. Regardless of the electricity supplier, the distribution utility delivers the contracted electricity to a customer's meter and charges for that service.
In general, retail choice is available only for utility customers served by investor-owned utilities (IOUs), although there are a few electric cooperatives, municipal utilities, and government operated utilities that offer retail choice. In 2022, retail choice was available for all utility customers served by IOUs in the District of Columbia and 13 states: California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Rhode Island. Among those states, California, Illinois, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, and Rhode Island have implemented community choice aggregator programs that utility customers can opt in or opt out of participation. In Texas, all customers of electric utilities that are connected to the electric grid managed by the Electric Reliability Council of Texas (ERCOT) are required to choose an electricity provider. Six states have only non-residential utility customer retail choice: Michigan, Montana, Nevada, Oregon, Virginia, and Washington.
Electric utility customers may contact their distribution utility or the utility regulatory commission in their state to see if and to what extent retail choice is an option and if a list of alternate electricity suppliers is available.
Learn more:
State-by-state information on energy choice
Residential retail electric choice participation rate has leveled off since 2019
Residential retail choice participation leveled off in 2021 but participation rates vary by state
Residential retail choice recovers from dip in customers, growth trends continue in California and Massachusetts
Last updated: February 6, 2024.
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