Can electric utility customers choose their electricity supplier?
Some electric utility customers have the option to choose an alternate electricity supplier in states where the electric utility industry has been restructured. This consumer option is often called retail choice or customer choice. The alternate supplier is the company that generates and/or markets electricity, often referred to as a retail electricity marketer. The alternate supplier may be an affiliate of the distribution utility. Some suppliers offer electricity generated from specific energy sources, such as wind and other renewable energy sources.
Regardless of the electricity supplier, the distribution utility delivers the contracted electricity to a customer's meter and charges for that service. Services may be billed in a consolidated bill where electricity and other costs are itemized separately, or services may be billed separately by the two companies (called dual billing). Some utility customers may have the option to choose their billing preferences.
In general, retail choice is available only for utility customers served by investor-owned utilities (IOUs), although there are a few electric cooperatives, municipal utilities, and government operated utilities that offer retail choice. In 2022, retail choice was available for both residential and non-residential electric utility customers served by IOUs in the District of Columbia and 15 states: California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Texas. In California, residential retail choice is available to electric utility customers who participate in community choice aggregators programs. More information on that topic is provided in the Learn more links below. In Michigan, there are caps on the number of utility customers that are allowed to participate each year. In Texas, all customers of electric utilities that are connected to the electric grid managed by the Electric Reliability Council of Texas (ERCOT) are required to choose an electricity provider. Three states have only non-residential utility customer retail choice: Georgia, Oregon, and Virginia, and these states have conditions on participation in retail choice.
Electric utility customers may contact their distribution utility or the utility regulatory commission in their state to see if and to what extent retail choice is an option and if a list of alternate electricity suppliers is available.
Learn more:
State-by-state information on energy choice
Residential retail choice participation leveled off in 2021 but participation rates vary by state
Residential retail choice recovers from dip in customers, growth trends continue in California and Massachusetts
Last updated: January 26, 2023
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