Fourteen states currently have a fully restructured competitive electricity market. Nine states are partially restructured. In total, more than 20 states have some form of a competitive electric market. But how great is access to competition in those states?

To take a closer look at how state governments and regulators are supporting their residents –– or not –– with competitive energy options and resources, public policy think tank R Street Institute went state-by-state to assess electricity competition benchmarks. R Street has developed a first of its kind grading report titled “State-by-State Scorecard on Electricity Competition,” that grades each state on a set of factors based on how effectively states empower consumers in electricity markets. 

All but one state was graded in this report –– Nebraska was omitted because it is served entirely by public power utilities. R Street’s grading system ranges from A+ (best) to F- (worst), using a detailed rubric across five categories:

1. Retail Market Access – Do customers have the ability to choose their electric supplier?
2. Competitive Procurement – Does the state use competitive bids to acquire power?
3. Wholesale Market Participation – Are utilities and suppliers part of an RTO, ISO, or both?
4. Smart Metering & Data Access – Do customers and third-party suppliers have access to real-time usage data?
5. Consumer Education & Protections – Are consumers equipped to make informed decisions?

States such as Texas, Illinois, Ohio, and Pennsylvania were the highest performing states. They have well-developed retail choice markets, plus other factors, including access to a wholesale market, smart metering, or great consumer education and protections. In contrast, states like Alabama, Florida, and Wyoming didn’t score that well due to monopoly structures, limited data transparency, or a lack of market access for consumers.

But what can all states be doing to improve their grades and provide better benefits to consumers?

R Street Recommendations

R-Street’s report offered numerous recommendations on how state leaders, regulators, and stakeholders can make meaningful improvements and unlock the benefits of retail energy choice. Some of these recommendations are:

• Full market restructuring
  • Create and pass legislation that allows all residential, commercial, and industrial consumers to shop for their electric supply in a competitive market. This involves removing statutory barriers and establishing licensing and oversight rules for competitive suppliers.
• Joining (or increasing participation in) a Regional Transmission Organization (RTO) or Independent System Operator (ISO)
  • States that participate in an RTO or ISO benefit from transparent pricing and competitive procurement. States that do not currently participate in either an RTO or ISO should prioritize joining.
• Smart Meters and Data Access
  • Advanced metering infrastructure (AMI) and consumer-facing tools allow suppliers to offer personalized products, enhance energy efficiency, and increase engagement. States should make smart meters a standard practice and require utility data portals with a user-friendly process for customers to give suppliers permission to access their data.

Improvements That Can Be Addressed Today

There are also recommendations that can take place more immediately. In comparing states, there are a couple of limitations that were recurring –– limitations that REAL has advocated to correct to improve customer experiences. Those recommendations include:

•  Accessibility
  • States that have retail choice should provide consumers with a government-run website that is promoted and easy to access, contains ample information to educate consumers making comparisons, and is easy to navigate for the products and prices available to that customer.
• Education and communication
  • All states should be regularly communicating with and providing consumers with resources that inform them on rate changes, retail supply offers, and available products in their area, if options are available. These resources should also be available in different languages to better serve more populations. Communications can happen in various forms, including direct mail, email, social media, press releases, and on the state’s website.
  • REAL provides resources for some restructured states:
    • State Profiles: Our state profiles contain a comprehensive overview of the current energy landscape, renewable energy requirements, and consumer protections.
    • Energy Shopping Guides: Our shopping guides help educate customers on how to effectively shop and compare electric suppliers through state-managed shopping platforms.
    • Monthly Energy Product Summaries: Each month, we publish summaries to break down the lowest fixed-rate offers and 100% renewable offers from retailers, organized by each utility service territory. Additionally, users can view a selection of value-added and unique products available from retailers in each territory.
• Customer protections
  • Consumers in all states should have access to their electricity usage data and be able to share that data with consultants, suppliers, or others to help the consumer become more efficient in their energy usage and understand alternative options that might better serve their energy needs. Aside from utility companies making this information more readily available, the deployment of smart meters will also improve data collection, and therefore can support greater transparency.

From Scorecards to Solutions

The results of this state-by-state analysis further highlight the limitations of monopoly utility markets when compared to restructured markets. Competition applies pressure to keep prices down, drives innovation, empowers consumers, and enhances accountability — all while reducing exposure to unnecessary utility risks.

While the letter grades provide a benchmark, the scorecard’s true value lies in identifying where states may be underperforming and how they can learn from one another to deliver better outcomes for electric customers. This scorecard serves as a valuable resource, especially at a time when state leaders are attempting to address energy affordability and reliability concerns.

We urge policymakers and regulators across the country, especially in low-scoring states, to see this report as a roadmap, not a verdict. We’re committed to helping states evolve their markets and raise their scores. Not for the sake of a letter grade, but for the millions of consumers who deserve better choices, better prices, and better products.