Energy Deregulation: States with Deregulated Electricity & Natural Gas

Energy Deregulation: States with Deregulated Electricity & Natural Gas

See which U.S. states have deregulated electricity and natural gas.

Thad Warren By Thad Warren
Fact Checked
Kendra Aquino By Kendra Aquino

Ever heard the term "energy deregulation" and wondered what the fuss is about? Simply put, it means you've got the power (pun intended) to choose your energy supplier. That's right – in some states, you're not stuck with one company for your electricity and natural gas.

Instead, you can shop around for the best rates, like picking between Netflix or Hulu. But not every state is on this bandwagon. Let's dive into which states have flipped the switch on deregulation and what that means for you.

map of deregulated electricity and natural gas in the United States

Which States have Deregulated Electricity?

So, which states have deregulated electricity? Here is a full list of deregulated energy markets. This means if you're living in one of these places, you've got choices for your electricity provider.

Check out the table below for a snapshot:

StateDeregulated SinceResidentialCommercialNotes
Texas2002YesYesFull retail competition for both sectors.
New York1996YesYesChoice for both but with utility - owned delivery systems.
CaliforniaPartialNoYesDeregulation mainly forlarge commercial customers.
Pennsylvania1997YesYesWide choice for both residential and commercial.
Illinois1997YesYesOpen market for both sectors.
Ohio2001YesYesChoice available across the board.
Massachusetts1998YesYesFull competition for both.
NewJersey1999YesYesAll customers can choose.
Maryland1999YesYesOpen competition for all.
Connecticut2000YesYesRetail competition for both residential and commercial customers.

States with Deregulated Natural Gas

For natural gas, the distinction is also crucial. These states have energy deregulation laws in place for natural gas.

StateDeregulated SinceResidentialCommercialNotes
Georgia1997YesYesFull market competition,with a strong residential focus.
Ohio1997YesYesConsumers in both sectors have options.
Pennsylvania1999YesYesDiverse choices for residential and commercial customers.
Illinois1997YesYesOpen to both sectors.
MichiganPartialNoYesChoice program mainly for commercial customers.
NewYork1996YesYesMarket open for both.
New Jersey1999YesYesConsumer choice across the board.
Maryland1999YesYesCompetitive market for both sectors.

Commercial vs. Residential Deregulation

Adding these distinctions helps underline that while some states offer deregulation across the board, others might limit it to commercial customers, often because the volume of use in the commercial sector can support a competitive market more robustly.

In contrast, residential deregulation opens up the market to individual consumers, allowing them to choose based on rates, customer service, and green energy options.

Understanding whether your state allows for commercial, residential, or both types of deregulation can guide you in making informed decisions about your energy provider.

Whether you're a business looking to cut costs or a household interested in renewable energy options, knowing your state's stance on deregulation is crucial.

Deregulation Timeline

The journey toward deregulation has been a patchwork process across the U.S., with states taking their own paths. Here’s a quick rundown:

  • Mid-1990s to Early 2000s: A wave of deregulation began, led by pioneers like California and Pennsylvania, aiming to increase competition and lower prices.
  • 2000s: Some states, like Texas, fully embraced deregulation, while others took a more cautious approach or faced challenges.
  • 2010s to Now: The landscape has stabilized somewhat, with no new states fully deregulating but many adjusting policies to benefit from partial deregulation and improve market conditions.

What Deregulation Means for Consumers

Deregulation is a bit like being given a menu instead of a single meal option. It means you can:

  • Shop for better rates: Like hunting for deals online, you can look for energy suppliers with lower rates or better terms.
  • Choose renewable options: Interested in going green? Deregulation often means more choices, including renewable energy sources.
  • Experience better customer service: With competition, providers might work harder to keep you happy.

But, and it's a big but, it also means you need to be savvy. Not all deals are created equal, and it's essential to read the fine print and understand what you're signing up for.

In a nutshell, deregulation can be a win for consumers—more power to choose (literally) and potentially lower bills. But it pays to be informed and shop wisely. So, whether you're in a deregulated state or just curious about the energy market, knowledge is power.