Protecting Energy Choice

The U.S. energy industry has long been dominated by a prevailing monopoly system in many states, limiting consumers' ability to choose their energy providers and stifling competition. Meanwhile, competitive energy market consumers have enjoyed the freedom of energy choice – the ability to shop from diverse energy options and select energy services that align with their preferences and values.

Energy choice is challenged frequently because monopoly market advocates believe standard utilities should be in complete control of providing energy to consumers. They work hard to influence policy in their respective markets - often by sharing misinformation about retail energy providers or the competitive market as a whole.

Eliminating or limiting the competitive energy market can cause consumers to lose access to their current energy plans, be forced into standardized, one-size-fits-all options, and become subject to an array of issues.

High energy bills

Because standard utilities often don’t have the flexibility to use different power purchasing methods, they are at the whim of live market conditions, remain exposed to price volatility, and are forced to purchase power at the current market price. As a result, their customers end up footing the bill for these price spikes.

This upcoming winter, it is projected that the electricity to heat homes may cost 10.2% more compared to last year.¹ Inevitably, customers that belong to a monopoly market or the standard utilities are going to continue to face high energy bills.

Little to no options

Monopoly markets leave customers no say in the energy they purchase or how it is sourced. Markets with energy choice have extensive types of services, namely in the area of renewable energy. A recent report on customer choice in the U.S. electricity sector analyzed different states with retail energy markets and found that energy choice has substantially increased the options available to consumers and played a critical role in the development of clean energy resources.²

Most importantly, customers want options. A recent study found that among states that have full retail choice, competitive retail suppliers account for about 22% of retail electricity sales to residential customers, 58% of sales to commercial customers, and 77% of sales to industrial customers in 2021. As reflected in the figure below, the majority of commercial and industrial customers and about half of residential customers have switched to competitive supply over the last two decades³.

Source: Retail Energy Advancement League

Low transparency

Without competition, monopoly utilities are not incentivized to improve the quality of their services or their reporting methods. In states like Maryland, all energy bills are delivered by the monopoly utility, including customers who purchase power from a competitive retailer. They have complete control over the usage data they convey to the customer and often make this information difficult to understand or calculate.⁴ As a result, overcharges or other unethical business practices are often overlooked by customers.

Current challenges

Despite standard utilities’ flaws, several states have faced proposed legislation that threatened energy choice. For example, in Maine, a report prepared for the Office of the Public Advocate argued that the state is better off eliminating retail choice and focusing resources on improving its standard utility program. In response to this publication and the introduction of accompanying legislation, LD 1431, NRG distributed a white paper published by the technology and consulting firm, Intelometry, Inc., refuting the findings of the OPA report.

Similarly, in Massachusetts, Attorney General Andrea Campbell’s office published a report pushing to ban energy choice, claiming consumers have been financially harmed by the competitive market. However, as the Retail Energy Advancement League explains on the topic, “Fixed rates, long-term contracts, and unlimited usage plans help customers avoid rate shock and provide customers with options and a wide range of value-added products and services not included in the default service.”⁵ In fact, nearly $1 billion was left on the table by Massachusetts customers not having moved off the utility-procured “basic service” and onto products supplied by the competitive market.⁶

What you can do

There are many steps individuals can take to protect their right to energy choice. Here are some easy strategies to get started:

1. Stay informed. By closely following energy policy news, consumers can stay ahead of potential threats to energy choice. Visit our NRG energy policy page to read the latest on energy choice legislation in several states along with other energy policy topics.
2. Engage with policymakers. Contacting representatives and expressing support for maintaining competitive energy markets can influence policy decisions. Participate in public hearings, write letters, and engage constructively with policymakers to voice your stance on energy choice. To receive guidance on how to effectively contact policymakers, sign-up using the newsletter form on the NRG advocacy site.
3. Join consumer advocacy groups. Organizations like My Energy Choice, NRG’s Grassroots Coalition, Choose Who You Use⁷, and the Retail Energy Advancement League are dedicated to protecting energy choice. These groups share the latest developments and valuable resources that help consumers safeguard their energy options.
4. Explore renewable energy options. Embracing renewable energy sources not only benefits the environment but also reinforces the need for energy choice. Supporting renewable energy initiatives contributes to the growth of sustainable alternatives in the energy market. Explore NRG’s sustainable residential and business products and discover what is available in your area.

The power of many

Although the groups against energy choice often have a large influence, the collective consumer voice plays a vital role in preserving the right to diverse and accessible energy plans. Together, these efforts will pave the way for a competitive, diverse energy market that puts consumers and their needs first. Explore the first segment of the Energy Choice two-part series to learn more about energy choice.