Electricity provider switching is the ability of power consumers to have an option to choose their

electricity Electricity is the set of physical phenomena associated with the presence and motion of matter possessing an electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as described by Maxwel ...

provider in a

deregulated Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental Economic regulation, regulation of the economy. It became common in advanced industrial economies in the 19 ...

electricity market as permitted by a state public utilities governing body.

Australia

The Australian market has been somewhat deregulated, but still sees consumers provided with a narrow band of choices.

Canada

Electricity is deregulated in two Canadian provinces:

Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...

and

Alberta Alberta is a Provinces and territories of Canada, province in Canada. It is a part of Western Canada and is one of the three Canadian Prairies, prairie provinces. Alberta is bordered by British Columbia to its west, Saskatchewan to its east, t ...

. Both markets showed price spikes in the first year of deregulation, but then settled down into a volatile but reasonably stable environment. Alberta's market is dominated by fossil fuel generation and as such reacts more closely to the price of natural gas. Ontario's generation mix is about 50% nuclear.

Ontario

The consumer has the choice between buying from their local utility (Local Distribution Company - LDC) or from one of the deregulated suppliers. There is a large range of contract options from a variable price to 1,3 or 5 year fixed prices. Electricity provider switching is difficult once the consumer is in one of these contracts, unless they are close to the end of a fixed price contract. However, as of January 2010 there is a maximum termination penalty allowed. A very important element in switching electricity providers in Ontario is understanding the Global Adjustment. This is an adjustment for some commitments government agencies have made on your behalf. It is included in the LDC Regulated Price Plan, but is an additional line item if a contract is signed.

Alberta

The consumer has the choice between buying from their local utility (Local Distribution Company - LDC) or from a deregulated suppliers. There are however many fewer of these in Alberta. Electricity provider switching is difficult once the consumer is in one of these contracts, unless they are close to the end of a fixed price contract. There is a

price comparison service A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot, aggregator or comparison shopping engine, is a vertical search engine that shoppers use to filter and compare pr ...

operation in Canada.

France

In France, electricity market is totally deregulated and consumers have the choice between the historical formerly state-owned provider EDF and several new private providers like Direct Énergie.

United Kingdom

Electricity supply has also been deregulated in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

United States

In deregulated markets such as

Texas Texas ( , ; or ) is the most populous U.S. state, state in the South Central United States, South Central region of the United States. It borders Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the we ...

and

Maryland Maryland ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic region of the United States. It borders the states of Virginia to its south, West Virginia to its west, Pennsylvania to its north, and Delaware to its east ...

, the state government may require the incumbent utility energy provider to allow for unlimited competition within the marketplace, where the consumer is free to choose any electricity provider. Electricity provider switching allows consumers to compare rates and services of different retail providers, and enroll in different contract types (such as fixed-price contracts, indexed, and hybrid). Switching is only practical if a customer is either buying from a utility, willing to pay an early termination fee, or is at the end of a contract with a provider. Certain U.S. states allow for

consumer choice The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption (as measured by their pr ...

in electricity providers, with

being the most-widely watched deregulatory scheme. Many other states are surveying the Texas deregulatory model in order to use its design as a model for the imposition of free market forces within such other power markets. As of 2019, 19 U.S. states and the

District of Columbia Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and Federal district of the United States, federal district of the United States. The city is on the Potomac River, across from ...

have "either full or partial retail choice." Along with aforementioned

and Texas, electricity deregulation is current in

Connecticut Connecticut ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the south. ...

Delaware Delaware ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic and South Atlantic states, South Atlantic regions of the United States. It borders Maryland to its south and west, Pennsylvania to its north, New Jersey ...

Illinois Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. It borders on Lake Michigan to its northeast, the Mississippi River to its west, and the Wabash River, Wabash and Ohio River, Ohio rivers to its ...

Maine Maine ( ) is a U.S. state, state in the New England region of the United States, and the northeasternmost state in the Contiguous United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Provinces and ...

Massachusetts Massachusetts ( ; ), officially the Commonwealth of Massachusetts, is a U.S. state, state in the New England region of the Northeastern United States. It borders the Atlantic Ocean and the Gulf of Maine to its east, Connecticut and Rhode ...

Michigan Michigan ( ) is a peninsular U.S. state, state in the Great Lakes region, Great Lakes region of the Upper Midwest, Upper Midwestern United States. It shares water and land boundaries with Minnesota to the northwest, Wisconsin to the west, ...

Montana Montana ( ) is a landlocked U.S. state, state in the Mountain states, Mountain West subregion of the Western United States. It is bordered by Idaho to the west, North Dakota to the east, South Dakota to the southeast, Wyoming to the south, an ...

New Hampshire New Hampshire ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...

New Jersey New Jersey is a U.S. state, state located in both the Mid-Atlantic States, Mid-Atlantic and Northeastern United States, Northeastern regions of the United States. Located at the geographic hub of the urban area, heavily urbanized Northeas ...

, New York,

Ohio Ohio ( ) is a U.S. state, state in the Midwestern United States, Midwestern region of the United States. It borders Lake Erie to the north, Pennsylvania to the east, West Virginia to the southeast, Kentucky to the southwest, Indiana to the ...

Oregon Oregon ( , ) is a U.S. state, state in the Pacific Northwest region of the United States. It is a part of the Western U.S., with the Columbia River delineating much of Oregon's northern boundary with Washington (state), Washington, while t ...

Pennsylvania Pennsylvania, officially the Commonwealth of Pennsylvania, is a U.S. state, state spanning the Mid-Atlantic (United States), Mid-Atlantic, Northeastern United States, Northeastern, Appalachian, and Great Lakes region, Great Lakes regions o ...

, and

Rhode Island Rhode Island ( ) is a state in the New England region of the Northeastern United States. It borders Connecticut to its west; Massachusetts to its north and east; and the Atlantic Ocean to its south via Rhode Island Sound and Block Is ...

. Seven additional U.S. states began the process of electricity deregulation but have suspended efforts:

Arizona Arizona is a U.S. state, state in the Southwestern United States, Southwestern region of the United States, sharing the Four Corners region of the western United States with Colorado, New Mexico, and Utah. It also borders Nevada to the nort ...

Arkansas Arkansas ( ) is a landlocked state in the West South Central region of the Southern United States. It borders Missouri to the north, Tennessee and Mississippi to the east, Louisiana to the south, Texas to the southwest, and Oklahoma ...

California California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...

Nevada Nevada ( ; ) is a landlocked state in the Western United States. It borders Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. Nevada is the seventh-most extensive, th ...

New Mexico New Mexico is a state in the Southwestern United States, Southwestern region of the United States. It is one of the Mountain States of the southern Rocky Mountains, sharing the Four Corners region with Utah, Colorado, and Arizona. It also ...

Virginia Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...

, and

Wyoming Wyoming ( ) is a landlocked U.S. state, state in the Mountain states, Mountain West subregion of the Western United States, Western United States. It borders Montana to the north and northwest, South Dakota and Nebraska to the east, Idaho t ...

. In 2019, Arizona's regulatory agency (

Arizona Corporation Commission The Arizona Corporation Commission is the Public Utilities Commission of the Arizona, State of Arizona, established by Article 15 of the Constitution of Arizona, Arizona Constitution. Arizona is one of only fourteen states with elected commission ...

) considered implementing retail electricity deregulation. The proposal was opposed by Arizona Public Service Co. (APS), an electric utility that provides electricity to 2.7 million people. APS said it was opposed because the change would "not be in the best interest of customers" because it would create issues surrounding reliability, "conflicts . . . with existing law," and clean energy implementation difficulties.

References

External links

''A Misguided Criticism of Texas Electricity Deregulation'', by Lynne Kiesling

{{DEFAULTSORT:Electricity Provider Switching Electric power distribution