NCPA - National Center for Policy Analysis

Competition Comes To Deregulated Utilities

March 24, 2000

Experts say that consumers have so far been largely apathetic to their new-found ability to choose among competing utility suppliers, since markets in some states began deregulating four years ago. Nevertheless, analysts forecast that within five years, 20 percent of Americans who have a choice will select alternate power or gas suppliers.

  • Overall, 14 million additional Americans this year will have an opportunity to pick an electric supplier -- the largest increase to date -- bringing choice to 36 million households.
  • Despite a 10-fold increase in the number of households opened to electric utility choice last year, only 800,000 switched.
  • By year's end, about 20 million of the 55 million households consuming natural gas will be able to pick among competing suppliers.
  • Those who decided to switch natural gas suppliers last year nearly quadrupled -- to three million.

While household consumers seem not to be in a rush to switch, businesses have embraced their new freedom and taken advantage of big savings.

So far only about half the states -- primarily those in colder climates -- have approved retail energy choice.

Source: Paul Davidson, "The Power of Choice," USA Today, March 24, 2000.


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