Growth in electric residential customers' use of competitive suppliers levels off in 2014

The number of residential electric customers buying from competitive retail suppliers leveled off in 2014 after increasing significantly between 2009 and 2013. The customer count was 8.1 million in 2009 and 16.8 million in 2013, an average annual growth rate of 20%. However, the customer count was 17.2 million customers in 2014, a more modest increase of 2.4% from 2013.

In 2014, there were 128.7 million electric customers in the United States, with 13% of those customers purchasing electricity from competitive suppliers. Currently, 21 states and the District of Columbia have adopted competitive electric retail programs in one or more of their residential, commercial, and industrial sectors. Sixteen of those states and the District of Columbia have competitive electric retail service for residential customers.

Three states -- Illinois, Ohio, and Pennsylvania -- had the largest growth in the number of competitively supplied residential retail customers between 2009 and 2013.

Illinois

In 2009, Illinois joined five other states (Massachusetts, Ohio, Rhode Island, New Jersey, and California) in enacting legislation that allowed communities and municipalities to negotiate with power providers on behalf of their citizens, for residential and small commercial customers. The Illinois Power Authority purchased bulk power on behalf of utilities like ComEd and Ameren from competing wholesale suppliers.

At the start of the program in 2009, participation in residential retail electric choice programs was at less than 1% of total residential electric customers. However, from 2011 to 2012, Illinois residential retail choice customers increased from 2% to 19% of total residential electric customers. In 2013, the share of customers increased to 56% of total residential electric customers. The share in customers stabilized in 2014 at 57% of total residential electric customers.

The increases in those years were the result of revisions by the state legislature to the Illinois community aggregation law, outreach programs aimed at easing the aggregation process for communities, and a steep drop in wholesale power prices.

Ohio

From 2009 to 2010, Ohio more than tripled the number of residential retail choice customers, from 7% to 22% of total electric customers. By 2014, the number of residential retail choice customers reached 46%.

One reason for the increase in 2009 was a fixed-rate offer from Dominion Energy to the first 25,000 Duke Ohio customers who signed up by September 30, 2009; the fixed electric rate was set at 6.88 cents per kilowatt hour through December 2010. This fixed rate was approximately 20% lower than the existing supplier's (Duke Energy) then-current electric rate price of 8.61 cents per kilowatt hour. The lower Dominion Energy rate would apply only to the electricity-consumed portion of a customer's total electricity bill.

Another possible reason for the increase in customers is the approval by the Ohio Public Utilities Commission of Duke Energy Ohio's Electric Security Plan-Standard Service Offer (ESP-SSO) to replace the Market-Based Standard Service Offer (MBSSO). The plan requested recovery of costs for fuel used to generate electricity, electricity purchased at the wholesale price, emission allowances, and federally mandated carbon taxes. The goals of the plan included creating price stability, ensuring an adequate supply of electricity, and promoting economic development, job retention, and energy efficiency and conservation. The plan was in effect through December 31, 2011.

Pennsylvania

In Pennsylvania, the share of total residential electric customers choosing alternate suppliers increased from 3% in 2009 to 35% in 2014.

From 2010 to 2011, residential retail choice customers in Pennsylvania grew from 9% to 18%. This growth may be because of the Electricity Generation Customer Choice and Competition Act enacted by the Pennsylvania Public Utility Commission in 2010. The Standard Offer Program, under the Electricity Generation Customer Choice and Competition Act, is geared to customers who are using their default supply, which means they are paying their utility rather than a competitive supplier for electric generation. Customers receive a 7% discount off the utility's generation rate, or price to compare, at the time of enrollment for 12 months at a fixed rate. The agreement includes no enrollment or cancellation fees, so customers can switch or cancel at any time without penalty.

Principal Contributor:

Lolita Jamison
(Lolita.Jamison@eia.gov)