Pricing Data Confirms Families Pay More in Deregulated Electricity States
For years, proponents of electricity deregulation have argued that competition lowers costs for consumers. New data tells a very different story.
According to new proprietary analysis by Power for Tomorrow (PFT), informed by 2024 Energy Information Administration (EIA) data, residential customers in deregulated electricity states are paying dramatically more for power than those in traditionally regulated markets.
The Price Gap Is Significant and Growing
Across the lower 48 states, the contrast is stark:
Average residential price in deregulated states: 21.80 cents per kWh
Average residential price in regulated states: 14.18 cents per kWh
That means:
U.S. households in deregulated states pay 42% more on average
In the lower 48 states, the difference jumps to 54% more
This is not a marginal difference—it is a structural cost burden that directly affects household budgets, especially for low- and middle-income families.
Deregulation Dominates the Highest-Cost States
The distribution of prices further underscores the trend.
7 of the 10 highest-priced states (including Washington, D.C.) are deregulated
8 of the 10 highest-priced states in the lower 48 are deregulated
11 of the top 15 highest-priced states are deregulated
By contrast, the lowest-cost states tell a completely different story:
All 15 of the lowest-priced states are fully regulated
In other words, if you want affordable residential electricity, regulated markets overwhelmingly outperform deregulated ones.
What This Means for Energy Policy
These findings raise serious questions about continued efforts to push deregulation as a one-size-fits-all solution. While competition may work in theory, electricity is not a typical consumer good. Power systems require long-term planning, infrastructure investment, reliability standards, and regulatory oversight—especially as demand grows from electrification, data centers, and advanced manufacturing.
Regulated markets provide:
Price stability
Long-term system planning
Consumer protections
Clear accountability
Deregulated markets, by contrast, often expose customers to price volatility, market speculation, and fragmented oversight—costs that ultimately show up on monthly bills.
The Bottom Line
The data is clear: electricity deregulation has not delivered lower prices for residential consumers. In fact, families in deregulated states are paying substantially more—often without seeing commensurate benefits in reliability or service.
As policymakers consider reforms to meet future energy demand, affordability must remain central. This analysis demonstrates that smart regulation—not deregulation—has been the most reliable path to lower residential electricity costs.