If you want to understand electricity costs for your Commercial & Residential businesses in deregulated markets, this guide is for you. We explain the true cost of electricity in these markets, how lower rates can help your business, and the average electric rates in each state. We also compare energy prices in deregulated and regulated states so you can see the differences. Here is everything you need to know about electric rates across the country.
Energy Cost in Deregulated Energy Markets: Is It Cheaper?
People argue about whether energy deregulation is good or bad for the economy. Some states say deregulation has hurt customers. Other states say opening their electricity markets has helped the economy. So the real question is: Are energy costs in deregulated markets actually cheaper?
To answer this, we need to look at different types of customers. For commercial, industrial, and government customers, energy in deregulated markets is often cheaper than local utility prices. These customers usually work with skilled energy brokers. The energy brokers help them plan their energy purchases and renew contracts on time. These customers are careful and only choose plans that cost less than the utility’s default price.
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Residential customers, however, sometimes pay more than the local utility rate in deregulated energy states. This happens because many people forget to renew their energy contracts. When the contract ends, they often switch to month-to-month variable rates by accident. These rates can be 100 200% higher than the local utility price. This can make the overall numbers look worse for residential customers.
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Deregulation’s Effect on Costs
Possibility of lower costs:
The goal of deregulation is to lower prices. More competition can push energy providers to offer better rates.
Price changes:
In recent years, many deregulated markets have seen big price increases. This often happens because natural gas prices can change quickly.
Higher average costs:
Some studies show that deregulated states may have higher average electricity rates than regulated states. However, this can also happen because many states that chose deregulation already had higher prices before they started the process.
Average Cost of Electricity Rates by Regulated and Deregulated States
If you want to know whether you are paying a good electricity rate for your home or business, it helps to understand the average rate in your state. The table below shows the average electricity cost in each state in 2022. The source is EIA.gov.
State | Avg. Price (cents/kWh) |
Alabama | $10.18 |
Alaska | $20.02 |
Arizona | $10.73 |
Arkansas | $9.1 |
California | $19.65 |
Colorado | $10.9 |
Connecticut | $18.32 |
Delaware | $10.5 |
District of Columbia | $12.81 |
Florida | $10.67 |
Georgia | $10.43 |
Hawaii | $30.31 |
Idaho | $8.17 |
Illinois | $10.14 |
Indiana | $10.36 |
Iowa | $9.13 |
Kansas | $10.47 |
Kentucky | $9.12 |
Louisiana | $8.82 |
Maine | $13.96 |
Maryland | $11.48 |
Massachusetts | $19.06 |
Michigan | $12.93 |
Minnesota | $11.08 |
Mississippi | $9.5 |
Missouri | $9.85 |
Montana | $9.5 |
Nebraska | $8.84 |
Nevada | $8.58 |
New Hampshire | $17.37 |
New Jersey | $14.01 |
New Mexico | $9.79 |
New York | $16.11 |
North Carolina | $9.29 |
North Dakota | $8.65 |
Ohio | $9.76 |
Oklahoma | $8.52 |
Oregon | $8.95 |
Pennsylvania | $9.97 |
Rhode Island | $18.44 |
South Carolina | $9.96 |
South Dakota | $10.43 |
Tennessee | $9.78 |
Texas | $9.14 |
Utah | $8.34 |
Vermont | $16.34 |
Virginia | $9.14 |
Washington | $8.75 |
West Virginia | $8.87 |
Wisconsin | $11.01 |
Wyoming | $8.25 |
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Key Factors Affecting Your Bill
In a deregulated market, your electricity bill is typically composed of two main parts:
- Generation Charges: This is the cost of producing the electricity, which is the competitive portion where you can shop for different providers and plans (e.g., fixed-rate, variable-rate, or green energy plans).
- Transmission and Distribution Charges: These are the costs for delivering the electricity through poles and wires. These charges are set by the local utility and are regulated by the state’s public utility commission, so they are not competitive.
To find the best rate, consumers in deregulated areas must actively compare plans, review the “Electricity Facts Label” (EFL) for hidden fees or termination clauses, and monitor their usage levels. Many states, such as Pennsylvania and Texas, offer official state comparison tools to help residents shop for providers.
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How You Can Benefit From Lower Energy Rates?
Energy costs affect both homes and businesses. Electricity and natural gas are important for daily life and for running a business. The price you pay for energy can impact your financial health. When your business gets a lower energy rate, you save money. These savings go straight to your bottom line. For homeowners, even a small difference matters. Paying 10 cents per kWh instead of 8 cents per kWh can save about $20 a month. This may not seem huge, but it could easily cover your Netflix bill each month.
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For large industrial companies, energy costs affect the cost of making products. If you use electricity or natural gas in your production, lower rates mean you can produce goods for less money and earn more profit. Working with an energy broker can help you get the best rates and reach your financial goals.
Are You Looking for Lower Electric Costs?
Lower energy costs are helpful for both businesses and consumers. But finding the lowest rates in your area can be hard. A trusted energy broker like Great Energy 1can make this easier. A professional Energy broker can help you find the best and cheapest energy plan for your Commercial or Residential businesses. If you want to lower your energy costs, contact us today to speak with an expert energy advisor.