Updated as of June 2020

In 2017 and 2018 RESA published two whitepapers by the late Dr. Phil O’ConnorRestructuring Recharged: The Superior Performance of Competitive Electricity Markets 2008-2016 (April 2017) and The Great Divergence in Competitive and Monopoly Electricity Price Trends (September 2018). RESA has continued to maintain the relevance of this work by periodically updating the price trend and related data that Dr. O’Connor compiled in these two whitepapers and is posting this data for all to reference on its website. The most recent data continue to support the same insights and conclusions that Dr. O’Connor presented in 2017 and 2018.

An introduction and overview of the whitepapers and updated charts based on this work was written by Dan Allegretti.



Restructuring Recharged: The Superior Performance of Competitive Electricity Markets 2008-2016 (April 2017)

In Restructuring Recharged, Dr. O’Connor begins with a history of the restructuring of the electric power industry. He then takes us from this history into the empirical evidence (predominantly based on EIA data) with review of the price divergence between restructured and traditional monopoly states, the attraction of investment capital and the performance of merchant generation facilities in both types of jurisdictions. His conclusions are compelling as he explains the superior performance of customer choice policies and the unsustainability of the monopoly model in a world in which technological innovation is driving down demand for electricity and requiring investment to adapt to this constant change.

Download the full Restructuring Recharged Whitepaper

Top 3 Charts from Restructuring Recharged:
(Updated through latest data available as of June 2020)

Figure 3 - 14 Customer Choice Jurisdictions

These 14 jurisdictions (13 states plus Washington DC) each have enabled retail choice for nearly all customers. Additionally, these 14 jurisdictions represent nearly 1/3 of all electricity consumption in the continental US. 

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Figure 6 - Percentage of Load Switched in the 14 Competitive Jurisdictions

This figure shows that as of 2019, the great majority of load is now being served by non-utility suppliers. In fact, 72.0% of load eligible to switch in the 14 customer choice markets was served competitively with retail pricing and products by non-utility suppliers. It is interesting to observe that the vast majority of C&I load (85.8%) has switched to non-utility supply. Meanwhile, about half (47.5%) of the residential load in the competitive jurisdictions have switched to supply procured by retail suppliers. Meanwhile, most of the remaining load in these 14 markets is served with market-priced supply procured in the competitive wholesale market by wires utilities acting as default providers.

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Figure 12 - Inflation-Adjusted Weighted Average Percentage Price Change by Customer Class, Competitive vs. Monopoly States, 2008-2019

This figure shows the aggregate inflation-adjusted percentage changes in weighted average prices of delivered supply for the groups of 14 competitive jurisdictions and the 35 monopoly states from 2008 through 2019.

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In addition to the three figures from Restructuring Recharged updated above, Figures, 4, 5, 7-11, 13-20, and 22-25 have also been updated and made available here. Download all updated charts from Restructuring Recharged



The Great Divergence in Competitive and Monopoly Electricity Price Trends (September 2018)

In The Great Divergence, Dr. O’Connor examines electricity price data across the United States in both competitive and regulated monopoly states and across a decade of time to reach a compelling set of conclusions. The insight from this paper is that by looking past price comparisons between or within particular states (or within particular years) a more profound trend emerges: states that rely on regulated monopoly power supply service have seen prices rise over time at a far steeper rate than those states that restructured to adopt competitive retail choice. In other words, regardless of the experience of any individual customer at any particular point in time, the states that made the decision to implement competition achieved a significantly lower weighted average cost of electricity than if they continued to rely upon a regulated monopoly structure. The paper refers to this startling trend as “The Great Divergence.”

Download the The Great Divergence Whitepaper

Top 3 Charts from The Great Divergence:
(Updated through latest data available as of June 2020)

Figure 2 - All-Sector Weighted Average Percentage Price Change, Choice vs. Monopoly States, 2008-2019

The All-Sector annual weighted average price in the 35 monopoly states was 19.5% higher in 2019 than in 2008. In contrast, the All-Sector annual weighted average price for the competitive retail markets was 6.9% lower than in 2008. The dollar implications of such spreads in price paths are large. If 2008-2019 annual percentage price changes in the thirty-five monopoly states had tracked with percentage price changes in the fourteen competitive jurisdictions, all consumers in the monopoly states would have saved one-third of a trillion dollars ($442 billion).

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Figure 6 - All Sector Price % Price Change by State, 2008-2019

When the states are ranked by percentage change in each state’s average All-Sector price change over this period, the competitive states tend to cluster in the lower range and the monopoly states tend to occupy the higher parts of the rankings.

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Figure 12 - Change in Capacity Factor, 1997, 2008, and 2019 (Generation Output/Potential Output)

Monopoly regulation and competitive markets accord fundamentally different treatment to power plant utilization. The decline in power plant portfolio capacity factor has been larger, both nominally and proportionally, in the monopoly states than in competitive jurisdictions as shown in this figure. Plant utilization, as measured by capacity factor, has declined in far greater proportion in the group of monopoly states than in competitive markets, due in great part to the shift from coal toward gas. However, as long as rate-based capacity is considered “used and useful”—even if underutilized— full cost recovery is accorded, with consumers absorbing those costs. In contrast, underutilized or uneconomic capacity in competitive markets will tend to experience adverse financial consequences under the same conditions. The difference is that investors, not customers, are the ones bearing the risk of changing market fundamentals. 

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In addition to the three figures from The Great Divergence updated above, all figures have also been updated and made available here. Download all the updated charts from The Great Divergence



Customer Reliability Analysis

Some opponents of restructured markets claim that introducing competition and allowing customers to choose their electric supplier will harm or negatively impact reliability for customers. This false narrative is often stated when restructuring and competition are introduced as an alternative in a traditionally vertically integrated monopoly state. In search of the facts, RESA obtained the standard reliability metrics as measured and published by U.S. Energy Information Administration (EIA) and grouped the data into two categories: (1) utilities that enable full retail choice in their jurisdictions, and (2) those that do not. From there, RESA created a weighted-average for each reliability metric for each grouping by year and compared these reliability metrics side-by-side. Upon examination of this data, it is clear that delivery service reliability has not been adversely affected in competitive jurisdictions.

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