The power to choose: How some states let you pick (and save on) your electricity plan

Did you know that in some states, you can shop around for cheaper electric rates the same way you would shop for a cell phone plan?

These states have “deregulated electricity markets,” which means they give residents the power to choose who supplies their electricity. The problem is, many people don’t even realize they have this choice.

“It's not the most sort of known thing,” said Ben Hood, CTO and co-founder of WattBuy, a company that helps consumers navigate deregulated electricity markets.

With electricity prices reaching all-time highs, understanding whether you have the power to choose your power supplier could save you hundreds—even thousands—of dollars.

Most of us live in what's called a regulated electricity market: You're assigned an electricity company depending on your home address, and that's that. But some states have deregulated electricity markets—or some variation of it—including:

• Connecticut

• Delaware

• Illinois

• Maine

• Maryland

• Massachusetts

• Michigan

• New Hampshire

• New Jersey

• New York

• Ohio

• Pennsylvania,

• Rhode Island

• Texas

• Washington, D.C.

Hood said the idea for electricity deregulation emerged in the 1990s, when state governments decided to separate “electricity delivery” and “electricity supply” to make the market more competitive. (This is why you now see them listed separately on your electric bill.)

Traditional utilities have always been monopolies—it's one company that builds the power plant, the transmission lines, and delivers electricity to your home. That’s still the case in the majority of states, but if you live in a deregulated state, you have the power to choose which company will supply (or generate) your electricity. No matter where you live, your assigned utility will deliver it.

Think of it like this: The utility company is your commute home. You have to take those roads, but you can choose where you buy your fuel to get there.

Hood said state leaders looked at energy deregulation as a solution, as they were “trying to make sure that the electricity prices were not getting out of hand for their citizens.”

Yet now, over three decades later, electricity prices have surged to historic levels in recent years, making the case for competition stronger than ever.

The most obvious advantage of choosing your electric provider is savings—Hood said WattBuy customers save up to 20% on their electric bills. With electricity rates reaching all-time highs and projected to continue rising, it seems like an ideal time to live in a state that lets you shop for electricity deals.

Locking in fixed rates

Many electricity providers offer a fixed-rate option that guarantees you'll pay the same monthly price throughout your contract.

"We've seen the numbers: Electricity prices are going up 6%, electricity inflation is 5 or 6%. So, if you wanted to, in Pennsylvania, you can go and you can find a 36-month fixed-rate plan so that you lock in your prices for the next 36 months. So that for three years you're not going to have that 5 or 6% inflation," Hood explained.

Specialized plans for your lifestyle

Locking in a fixed rate isn't the only way to save: When there's competition for your dollar, each provider devises enticing plans to try to win you over.

For example, if you're a night owl or have an electric vehicle, Hood said some providers offer free electricity from 8:00 p.m. to 8 a.m.—if you have an electric vehicle, that means you could charge your car for free while you sleep. Or, if clean energy matters to you, you can choose an electric provider that offers "green" plans that rely on renewables.

"There are some exotic plans that are great for you to keep your eye out for if you have a special situation like an EV or a solar system or a battery in your garage," Hood said.

Everything about energy deregulation sounds pretty great, so why is it only available in select states?

"It's just what the state legislators valued for their consumers,” said Hood. “If they valued more sort of consistency and no confusion from the marketplace, then they might not deregulate electricity. But if they wanted to encourage that competition, then they might push into it really full force.”

The history of energy deregulation in the U.S.

Here's a little history lesson, because the deregulated electricity landscape has changed a lot since the ‘90s. At first, some states went all-in on consumer choice, including Texas, California, and Michigan (Michigan and California have since pulled back). Some states only give commercial customers a choice. Some only offer a choice for natural gas. And some states don't offer any choices at all.

As of 2025, only the 14 states plus Washington D.C. we mentioned above have electricity choice markets, and even then, each state has its own rules.

Texas: The poster child for deregulation

Texas is the only state where residents are required to choose a power supplier—you aren't automatically assigned to a local utility as you are in any other state. That means there's a lot more competition among third-party suppliers and a lot more energy suppliers for you to choose from.

"In Houston, you might have 300 options," Hood said.

Other deregulated states make "choice" a little harder to come by. For example, Hood said Michigan has a 10% cap, which is filled mainly by commercial customers, so very few residents get electricity choice. In other states, like New York, he said most residents have a choice, but they also have fewer providers to choose from because the state has strict rules for electricity companies.

"New York allows deregulation, but they require all of the deregulated plans to either be 100% renewable or to guarantee savings. So there's not a lot of variety," Hood explained.

Most states offer “community choice aggregation”

Aside from Texas, most deregulated states offer what's called "community choice," which means your local utility will be assigned to deliver and supply energy to your home by default, but you can opt for a different supplier.

Ben said the issue is that many people don't know they have this option. (I'm guilty: I moved to Massachusetts a year ago, and months went by before I sifted through my stack of ad mail and saw that several power companies were offering me different rates and plan options).

Clearly, there are benefits to electricity choice, but there are some downsides.

"There's a mental load that comes from needing to figure this out every three years if you sign up for a 36-month contract," Hood said. "If you only want one or two options, then having 300 is overwhelming."

Of course, many of us would rather have too many choices than none at all, but analysis paralysis is real. Hood said that's why tools like WattBuy exist.

"I mean, there are folks in Texas who are pulling out spreadsheets and calculating all of these things. We think, okay, we'll just do the math for you. We're good at math. We can do it for you," Hood said.

There’s also a dark side to retail electricity choice: Hood said the main reason he got into this business was to help protect consumers from scammers.

"There were door-to-door salesmen who were basically not explaining what people were signing up for, going into low-income neighborhoods and convincing people to sign up for a four-year contract that makes them double their electricity rate," Hood said.

That's why it's important to do your research and work with companies you can trust.

Most of us can agree that we'd like the freedom to choose who supplies our electricity. So the question is, why aren't all states moving toward deregulating their electricity?

"Most of the lobbying dollars that come from utilities go into state legislators. There's a lot of entrenched interests that fight that because they have little kingdoms and they would like to stay king of those little kingdoms," Hood said.

So nationwide deregulation would be challenging politically, to say the least. But whether you live in a deregulated market or not, understanding what it is and how it works is important—especially as our nationwide energy use increases.

"This type of innovation is going to be more important as we load the grid a little bit more," Hood said. "It's going to be so much more important for us to be able to eke all of the capacity out."

If you do live in a deregulated state, Ben said you should start by asking yourself this question: Am I spending too much on electricity?

"If you're happy with your electricity bill, then just go with it. But if you feel like August comes around and you're kind of dreading opening that electricity bill, then it behooves you to take a look," Hood said.

You can check if you're overpaying for your electricity for free on WattBuy. Its 90-second process may save you over $1,000 on your electric bills over the next three years.

Pair that with solar panels, a home battery, heat pumps, and an EV—all of which you can get through EnergySage—and you could probably kiss all your utility expenses goodbye.

Electricity choice isn't available everywhere, but for those who have it, the savings can be substantial. And for the rest of us? It's worth asking why our state leaders aren't fighting harder to give us the freedom to choose.