What retail choice gives you, and what it leaves untouched
Fourteen jurisdictions have genuine residential retail choice: Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Texas. Eleven are in the Northeast or mid-Atlantic; the outliers are Illinois, Ohio and Texas. Elsewhere it never arrived, was repealed, was suspended, or covers commercial customers only.
What choice gives you is control over half the bill. An electric bill in a competitive market splits into supply — the electricity itself, in cents per kilowatt-hour — and delivery, moving it to your meter. Shopping changes the supply half only.
The delivery half stays a regulated monopoly, and this is what households consistently misunderstand. The utility still owns the poles, the wires and the meter on your wall. It still reads that meter, still restores service after a storm, still sends the bill in most states, and still charges a delivery rate set by the state commission that no supplier can discount. Switching changes a line item, not the crew that shows up.
You are also never forced to shop. Every choice jurisdiction keeps a regulated default — standard offer, basic, default or last resort service, depending on the state — procured competitively by the utility and passed through without markup. In Rhode Island, supplier offers have been scarce and most households remain on last resort service. New Hampshire has taken a third route, with a growing share of households served by municipal Community Power aggregations buying for a whole town at once.
Compare the effective rate at your usage, not the advertised rate
Almost every mistake in a competitive market comes from comparing the wrong number. The advertised rate is a marketing figure calculated at a benchmark usage level. The number that sets your bill is the effective all-in rate at your usage, and the two can be a long way apart. The method takes fifteen minutes.
- Pull twelve months of bills and note the kWh each month. You need the range, not the average — a plan that works at 1,100 kWh in August may be terrible at 550 kWh in April.
- For each plan, rebuild the monthly cost from its terms at each of your own twelve figures: energy charge × kWh, plus any fixed fee, plus any minimum-usage penalty, minus any credit you would actually qualify for.
- Divide each month's total by that month's kWh. That is the effective rate you would really pay.
- Compare it against the utility's published default rate, leaving delivery charges out of both sides since you pay them either way.
The kWh cost calculator handles the per-unit arithmetic, and the electricity bill calculator takes a fixed monthly charge and a tax percentage alongside the rate, which is what shows a plan's real cost in a given month. A plan that wins at your average usage and loses at your winter low is a plan that loses.
The traps, named
These are not edge cases but standard structures, disclosed in the terms, each built so the headline is true while the bill is higher than it implies.
Rates quoted at 500, 1,000 and 2,000 kWh
Disclosure labels quote an average price at three benchmark usage levels, and a fixed monthly fee spreads differently across each. A hypothetical $10 fee is 2.0¢ per kWh at 500 kWh, 1.0¢ at 1,000 and 0.5¢ at 2,000 — one plan, three effective prices. Marketing quotes the flattering one, and a household at 700 kWh pays neither published figure.
Minimum-usage fees
A charge applied in any month you fall below a threshold, often 500 or 1,000 kWh. It penalises exactly the households that ought to be rewarded: small apartments, careful users, anyone who travels. A light user can end up on a higher effective rate than a heavy user on the identical plan.
Bill-credit plans
These advertise a very low headline rate that only works once a monthly credit lands, and the credit lands only inside a narrow band — say 1,000 to 2,000 kWh. Hit it and the effective rate is genuinely excellent. Miss it by one kilowatt-hour and the credit vanishes, leaving an energy charge set high precisely because the credit was meant to offset it.
Silent rollover at the end of the term
The most expensive one, because it costs nothing to fall into. When a fixed-rate contract expires the plan does not stop — it converts to a month-to-month variable rate the supplier resets at will, uncapped. Households discover it when a bill arrives at some multiple of the last, and there is nothing to dispute: the rollover was in the contract.
Two smaller ones: early termination fees, and teaser rates that expire after a few cycles into something higher.
What to do when a contract ends
Put the expiry date in a calendar the day you sign, with a reminder six weeks out. That one action prevents the most expensive failure in these markets.
When it fires, do four things. Read the expiration notice your supplier must send and note what rate you roll onto if you ignore it. Look up your utility's default rate, the published benchmark every offer should be measured against. Rebuild two or three offers at your own usage. Then switch, renew deliberately at a rate you have checked, or drop back to default service.
Switching takes effect on a meter-reading date, so start early. There is no interruption and no technician visit; the change is administrative. Ignore door-to-door and telephone approaches entirely — nothing about a good offer requires you to decide during a conversation you did not start. And if bill variance is what actually bothers you, budget billing is a more reliable tool than a supplier contract, because it fixes the timing rather than the price.
Has choice actually saved residential customers money?
For households as a group, the evidence is not flattering. Maryland regulators tightened supplier marketing rules after findings that many residential shoppers paid more than standard offer service — not more than they might have, but more than the regulated default they left. That a large share of shoppers do worse than doing nothing is the central criticism of residential choice, and it is fair. The mechanism is not fraud: the market rewards attention and charges for inattention.
The counter-argument deserves a hearing. Texas, the largest choice market in the country, buys at 16.44¢ per kWh — below the national average of 18.44¢. Texas bills are high at $180.18, but that is consumption: 1,096 kWh a month of Gulf Coast cooling. The choice states with genuinely high rates are Northeastern — New York 29.93¢, Rhode Island 29.46¢, Massachusetts 28.82¢ — and regulated Vermont sits at 24.89¢ and Alaska at 28.23¢. Regional fuel and delivery costs explain those figures far better than market structure.
What the record supports is narrower. Choice pays for a household that computes effective rates at its own usage, reads the terms for minimum-usage fees and credit bands, and diaries the renewal date. It costs one that signs on a headline number and forgets. If you will not do that, default service is the rational choice. The regulated states show what the alternative looks like, and the state-by-state averages put both groups side by side.
Frequently asked questions
If I switch suppliers, who restores my power in an outage?
The same utility as before. Retail choice separates who sells you the electricity from who delivers it, and only the selling half is competitive. Your local utility continues to own the poles, wires, transformers and meter, continues to read that meter, and continues to dispatch the crews after a storm. Suppliers own no infrastructure and have no role in restoration. Nothing about switching changes your outage priority, your response time or the number you call — which is still the utility's, never the supplier's. This is also why the delivery charge on your bill is identical whichever supplier you pick: it is set by the state commission, not negotiated.
My bill doubled and I did not change anything. What happened?
The most likely explanation is that a fixed-rate contract reached its end date and converted automatically to a month-to-month variable rate, which the supplier can reset each billing cycle without a cap. Check the supply section of your bill for the rate per kWh and compare it with what your contract specified. If the usage in kilowatt-hours is roughly the same as last year and the dollars are not, the price changed, not your household. You can leave a variable plan at any time without a termination fee, and you can return to the utility's regulated default service, though the switch takes effect on a meter-reading date rather than immediately.
Is the lowest advertised rate the cheapest plan?
Frequently not. Advertised rates are quoted at benchmark usage levels, typically 500, 1,000 and 2,000 kWh, and a plan's fixed monthly fee spreads across those benchmarks very differently — a $10 fee is 2.0¢ per kWh at 500 kWh and 0.5¢ at 2,000. Bill-credit plans post a very low headline that only materialises if your usage lands inside a specific band. Minimum-usage fees punish light months. Rebuild each plan's total cost at your own twelve months of usage and divide by kWh; the ranking often reverses once you do.
Can I just stay with my utility and never shop at all?
Yes. Every jurisdiction with residential choice maintains a regulated default supply service, variously called standard offer, basic, default or last resort service. The utility procures that power competitively on behalf of customers and passes the cost through without a markup, and the price changes on a published schedule rather than at a supplier's discretion. It is a perfectly defensible position, and in Rhode Island most residential customers are on it because active supplier offers have been scarce. If you are not prepared to check effective rates and track a renewal date, staying put usually beats shopping badly.