The emergence of alternatives to traditional vertically integrated utilities has transformed the electricity sector. While the seeds of utility deregulation were planted in the 1970s, the movement to open up markets began in earnest in 1992 with the Energy Policy Act.

Regulated markets feature ownership and control throughout the entire flow of electricity from power plant to meter.

In contrast, utilities in deregulated markets are only responsible for distribution, operation and maintenance from the point of interconnection at the electricity grid and back to the meter, billing the ratepayer for their electricity usage and acting as the provider of last resort.

Grid operators then manage wholesale electricity markets to ensure reliability, and retail suppliers can buy and sell electricity in those markets to end-users.

Over the last decade, many states in the Northeast, Mid-Atlantic and some in the Midwest have adopted deregulated electricity and/or gas markets. Some states, like Texas and California, have partial choice. 

When the electricity market is allowed to operate efficiently and more players are at the table, the price of power across markets is lower. Lower-cost forms of energy are granted entry and Americans reap the benefits. Competitive markets are dependent on a modern electric grid to deliver these benefits.


4.1.5 Paying for Transmission

  • Posted Rates

  • Rate Regulation

  • FERC Financials

  • About the Transmission System

  • Value of Investing in the Grid

  • A Better Future