When exactly did electric competition begin?

On November 30, 2011, a media call was conducted to announce the release of the 2011 ABACCUS report. During the call, the chairman of the Pennsylvania Public Utility Commission explained that the price caps on default service in Pennsylvania were just removed in 2011; therefore, competition in residential electricity was really just beginning. The numbers support Chairman Powelson’s declaration. Consumer switching numbers have been rising rapidly for a year or so. The number of retail suppliers is increasing. The number and types of distinct offers is increasing. But when did electricity competition begin in Pennsylvania? When have enough actions been taken to reform a market that we declare it “open to competition”?

In Texas, the “price-to-beat” default service (regulated basic or standard service) was in place from 1/1/2002 to 12/31/2006. During those five years, the residential consumer could take no action (or simply remain oblivious to retail choice), and be assured that they would receive service on a regulated rate (tariff). The PUC of Texas continued to set prices and adjust the price-to-beat every six months for fuel price changes. While it is difficult to compare one state with another, it appears that the disappearance of the price-to-beat marked the beginning of a significant new era in competitive electricity markets in the U.S. (The 2011 ABACCUS report states that phasing out default service is a key issue relating to electricity choice.) Many Texans were exposed to market forces on 1/1/2007 for the first time, even if they had not made an affirmative choice of retail supplier by then.

That was five years into the “opening of the market.” It’s now five years later … the tenth anniversary is approaching!  But when did retail electric choice in Texas actually begin, in 2002 or 2007?


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