Residential Rates: Regulated vs. Deregulated Markets

Residential Rates:
Regulated vs. Deregulated Markets

Figure 1. Residential rates for top 10 GDP states.

Georgia’s regulated, vertically-integrated market structure has consistently delivered some of the lowest residential rates among top 10 GDP states (Figure 1). Of these top 10 GDP states, only Georgia, Florida and North Carolina have regulated electricity markets—the others are deregulated.

More broadly, for the past 28 years residential rates in states with regulated electricity markets have been consistently lower than those with deregulated market structures (Figures 2 & 3). The U.S. average, black dashed line, is included for reference, and the vertical scale is consistent for both figures.

Figure 2. Residential rates in states with regulated electricity markets.

Figure 3. Residential rates in states with deregulated electricity markets.

If there’s an advantage to deregulated, non-vertically-integrated utility markets such as those in California, New York and New Jersey, rates isn’t one of them. Neither is long-term integrated resource planning. Moreover, a deregulated market will likely never build another nuclear power plant under its current market structure.



3 thoughts on “Residential Rates: Regulated vs. Deregulated Markets”

  1. David, excellent article and a great resource for many of us!

    A quibble, though. You have Vermont as a “regulated” state. It is not completely and fully deregulated: Vermont utilities can own both generation and distribution. However, Vermontit is mostly deregulated, IMO. Vermont is part of ISO-NE. The utilities buy power at typical grid auctions as well as having PPAs with defined generators such as Hydro Quebec. In public statements by government and utilities, Vermont usually compares its rates to the rates of other ISO-NE states.

    In other words, I would have put Vermont on the “deregulated” graph. It would fit right in to that graph, while it is an outlier on the regulated graph.


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