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APPA Analysis Examines Regulated, Deregulated State Power Price Trends

Increases in retail electric prices from 1997 to 2021 were about half a cent more in states with deregulated electric markets than in regulated states, though regulated states had a slightly higher percentage increase in prices, according to an American Public Power Association (APPA) analysis of data from the U.S. Department of Energy’s Energy Information Administration.

APPA’s analysis also found that rates increased significantly in all states from 2020 to 2021, largely attributable to a rise in natural gas prices. Average total rates increased by six-tenths of a cent, or 5.7%.

Also, average rates in regulated states increased by 5.3% (from 9.5 cents to 10 cents), compared to a 6.7% increase in deregulated states (from 12 cents to 12.8 cents).

Since 2012, residential rates in deregulated states have increased by 2.5 cents, compared to a 1.4 cent increase in regulated states.

The report reviews data on electric rates in 16 states plus the District of Columbia -- those with "retail choice" in place -- compared to states that have traditional rate regulation.

The data show that after 24 years of deregulation, the original promise of reduced prices has not materialized, APPA said.

The full report is available here.