Choosing Not To Choose

on May 18, 2011 at 3:30 PM

Electricity consumers in the US have to be forced to make choices about their power.

That’s the conclusion of a recent Energy Information Administration’s “Today In Energy” update, which compares customer uptake of competitive power suppliers in several states.

In Texas, electricity customers are required to choose a competitive electricity provider or they are assigned one, although there are a number of loopholes. Nonetheless, EIA data shows 60% of Texans inside the ERCOT Regional Transmission Organization have made choices about their power supply when compelled to by the state regulators.

Participation rates in Texas dwarf those in New York, Connecticut and Massachusetts, states with opt-in programs to allow consumers to choose their own power provider. Participation has grown in all three states after a slow start, but all of the states have less than 20% participation.

Only 3% of US electricity sales in 2009 were made by households actively choosing their power provider, a statistic the EIA attributes to low power prices weighed down by a huge overhang in natural gas production during the same period.

Despite the low participation rates to date, regulators remain committed to the choice programs, and utilities have begun to seek protection against the looming end of regulated electricity rates that guarantee power company returns.

Constellation Group’s experience with marketing power to consumers was a compelling reason behind its $7.9 billion planned purchase by Exelon announced on April 28.