The most common query that brings users to the ACCES website is whether one’s state allows energy choice. The creation of new state markets is marked by years of consumer advocates, industry stakeholders, regulators, and lawmakers working to create a dynamic market while also ensuring consumer protection. It may seem like a slow process, but that isn’t for lack of interest on behalf of consumers. Ratepayers in North Carolina, Arizona, Colorado, Florida, Arkansas, among other states, have found their way to www.competitiveenergy.org to research energy choice, and these future customers are interested in how it can come to their states.
The most common introduction of energy choice into a state is via the state legislature. As with all legislation, a bill is originated that is studied in committee and reported out to the chamber of origin, where it is voted on before being sent to the other chamber for a similar process. With an affirmative vote from both chambers (1), the bill is then presented to the governor for signature and enrolling as a law.
To actually implement the law, a state agency is tasked with promulgating rules and regulations for the marketplace – in most states, the Public Service Commission or Public Utility Commission.(2) This ranges from the licensure of energy suppliers, technical testing requirements by the utilities, establishing an approach to customer billing, setting up sales and marketing rules, and to providing consumer outreach which includes education on how a competitive market works. Even after legislative approval, the regulatory process to open a new market typically takes a year or more.
The second option to open a market to energy choice is by way of a constitutional amendment. It varies from state to state, but, for example, in Nevada, the amendment for energy choice had to appear on two consecutive ballots (in this case, in 2016 and 2018) and receive a super majority in order to pass. Similar to the legislative option, there would then be an agency tasked with implementing the regulations.
(1) Nebraska is a unicameral legislature.
(2) See http://competitiveenergy.org/consumer-tools/state-by-state-links/ for a list of these agencies in each state.
The industry has recently seen an uptick in energy choice expansion attempted via the constitutional amendment option. As mentioned, Nevada had the ballot choice in 2016 (when it passed overwhelmingly) but the subsequent question on the ballot failed in 2018. There is also a proposed ballot initiative in Florida for the 2020 election. While it is initially harder to pass a ballot measure leading to a constitutional amendment, it is likely the most secure way to ensure energy choice remains an option in the state, regardless of political trends in that state’s legislature or who occupies the governor’s mansion.
The least used approach to achieve energy choice is for a state agency to promulgate regulations that are formed under the authority of the agency itself. In New York, for example, the New York Public Service Commission, being tasked with ensuring energy access to all New-Yorkers, created a competitive market effectively without legislative input. Although it is a mature market that has thrived for many years, the lack of a statutory basis for the market in New York means the PSC can put significant restrictions on retail energy choice, which it has done in recent years.
Another query ACCES receives from consumers is how they can be an active participant in bringing energy choice to their state. As a consumer and constituent, residents have the ability to effectuate change – most of the ballot initiatives were started by consumer groups, there are many ways to be involved in energy access in one’s state, and very often there are joint consumer/industry participant organizations that work together to petition the state. Residents can also reach out to their state senator and representatives to share their views.
While ACCES does not take a position on new states entering the marketplace, we encourage all energy customers to be engaged consumers and citizens, whatever their position on bringing energy choice to their home state.
For more information about energy choice in your state, please visit our state-by-state map.