Highlights: November 2022

• Electricity demand in the California (CAISO) and Southern Company territories reached its lowest level in the past 12 months.

• Wholesale natural gas prices in New England, New York City, the mid-Atlantic, the Midwest, Texas, and the Southwest reached their lowest amounts in the past 12 months.

• Total average revenues per kilowatt-hour (kWh) rose by 11.8% from November 2021 to 12.46 cents/kWh in November 2022, and average revenues per kWh increased year over year in all four end-use sectors.

Key indicators

Residential retail choice participation leveled off in 2021 but participation rates vary by state

Data source: U.S. Energy Information Administration, Form EIA-861, Annual Electric Power Industry Report, and EIA-861 Annual Sales to Ultimate Customers by State and Sector, 2010–2021.

Note: Residential retail choice states include: California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Rhode Island, as well as the District of Columbia. Texas is excluded from data on residential retail choice customer totals because Texas's retail choice program is mandatory under state law in areas operated by the Electric Reliability Council of Texas (ERCOT).

In 2021, residential retail choice participation rates and customers leveled off, with choice customers increasing by only about 57,000 customers relative to 2020 and settling at 13.2 million customers. Participation rates in 13 states, as well as the District of Columbia, fell from 26.4% to 26.3%. This decline contrasts the previous five years (2016–2020), when customer choice programs added close to 3 million customers, and state average participation rates increased from 21% to 26.4%.

Residential retail choice programs give customers the option to purchase the energy component of their electricity service from one entity (an energy-only provider—for example, a retail power marketer), while a second entity (for example, a utility) delivers the electricity to the customer. These programs differ from traditional utility services, in which a full-service provider, the utility, both delivers the electricity to the home and purchases electricity on the customer’s behalf.

Data source: U.S. Energy Information Administration, Form EIA-861, Annual Electric Power Industry Report, and EIA-861 Annual Sales to Ultimate Customers by State and Sector, 2010–2021.

The District of Columbia and 19 states allow customers to choose their electricity supplier in at least one sector, but only the District of Columbia and 13 of these states allow, or have a significant amount of, residential customers choosing an alternative supplier. Although the national level had a modest gain in average participation rates, rates varied significantly across the states. Nine states and the District of Columbia saw a drop in participation rates, while only three states had increases in participation rates. Connecticut had the largest drop, from a 30.4% participation rate (451,000 customers) in 2016 to 16.4% (251,000 customers) in 2021. California, meanwhile, had the largest increase, from a 2.7% (364,000 customers) participation rate in 2016 to 29.9% (4,153,000 customers) in 2021.

The large change in California was due to legislation that created Community Choice Aggregators (CCA). CCA programs allow local governments to exercise greater buying power in purchasing electricity from retail power marketers on behalf of community residents and businesses while still having the power delivered by the local utility. CCAs act as the default provider within a given local community so when a community chooses to enroll, all customers are automatically enrolled and have to opt out and return to the traditional utility provider. Other retail choice models behave in the opposite manner, where consumers must opt in to a service provider other than the incumbent utility.

Data source: U.S. Energy Information Administration, Form EIA-861, Annual Electric Power Industry Report, and EIA-861 Annual Sales to Ultimate Customers by State and Sector, 2010–2021.

Note: Average prices are for residential retail choice states, including California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, and Rhode Island, as well as the District of Columbia.

Nationally, the average residential retail price rose 8.8% from 2016–2021. In the retail choice states, it rose by 11.7% (1.82 cents per kilowatthour [kWh]) on the state level, with a big difference between the bundled service (traditional utility service) and choice participants (energy from one company and delivery from another). Bundled service went up 9.4% (1.46 cents/kWh), but choice customer paid on average 18.3% more (2.84 cents/kWh). This price divergence started mainly in 2019 and widened through 2021 and offers a possible explanation for falling retail choice participation rates.

Data source: U.S. Energy Information Administration, Form EIA-861, Annual Electric Power Industry Report, and EIA-861 Annual Sales to Ultimate Customers by State and Sector, 2010–2021.

As in participation rates, price differentials between retail choice and bundled customers varied by state. In 11 states and the District of Columbia, rates for choice customers increased by more than those for bundled customers. The largest differential in this group was New Hampshire, where rates for bundled customers increased by 0.7 cents/kWh versus 6.1 cents/kWh for choice customers. Two states (New York and Illinois) had bundled prices increase by more than choice prices; the largest differential was in New York, where bundled prices increased by 2.2 cents/kWh versus a 1.1 cent/kWh rise for choice customers.

• Principal Contributor:

• Name: Marc Harnish
  Email: Marc.Harnish@eia.gov