Energy Competition Success: How Open Markets Deliver Savings
At the Alliance for Competitive Power (ACP), we’re believe energy should be more afforable-we’re rolling up our sleeves, standing shoulder to shoulder with communities, and seeing firsthand what happens when the power to choose lands squarely in your hands.
As we move through 2026, the landscape of electricity is shifting rapidly. Open markets aren’t just policy-they’re changing lives in real time.
Understanding Electricity Deregulation: A New Era for Consumers
Like most, you shrugged and paid the bill, expecting little to change. That all shifted with energy deregulation, which shook up the old monopoly model and invited competition to the table.
No more one-size-fits-all. According to Constellation Energy, this bold move "eliminated utility monopolies, increased competition, lowered costs, and improved service." In 2026, the contrast is stark: while monopoly-led regions are facing steep rate hikes to cover infrastructure, competitive states like Texas allow providers to absorb investment risks. This protects you from being forced to pay for a utility's budget overruns.
How Open Markets Are Delivering Real Savings
So, what does competition mean for your budget? It means putting more dollars back in your pocket. As of early 2026, the national average residential electricity rate has climbed to approximately 18.07¢/kWh, a 7.4% increase from 2024 levels.
Customers in competitive states reap the benefits of efficient pricing much sooner. For example:
Texas (Competitive Market): Offers some of the most competitive pricing, with average residential rates around 15.45¢/kWh.
California (Regulated/Traditional): Residents face rates as high as 31.58¢/kWh.
The Real Impact on Households
Electricity costs don't affect everyone equally. The "energy burden"-the percentage of household income spent on energy-reveals deep inequities:
National Average: The average American household spends about 3.2% of its income on energy.
Black Households: Spend an average of 5.1% of their income on energy, even when income levels are comparable to other groups.
Hispanic Households: Nearly 47% reported some form of energy insecurity in recent surveys, compared to 25% for non-Hispanic households.
These disparities are often linked to older, less efficient housing in historically disinvested communities. Competitive markets help solve this by incentivizing new, energy-efficient technologies and giving you the power to choose providers that offer better assistance programs.
The Thrill of Choice and Creative Energy Solutions
No two households are identical. Now, you don’t have to fit someone else’s mold. If you head over to Smart Energy’s discussion, you’ll see it’s all about tailoring plans to your budget and values.
More options: Handpick your provider based on price or 100% renewable energy commitments.
Creative features: Providers are using AI-driven tools in 2026 to help you monitor usage and save during peak hours.
Better service: If you don’t like your service, you can swap-forcing providers to hustle for your loyalty.
According to Integrity Energy, deregulated markets have turbocharged innovation, with competitive states leading the way in Virtual Power Plants (VPPs) that turn home batteries into grid assets.
Getting Market Design Right
Opening the market isn’t a cure-all; it requires thoughtful design and vigilant oversight. The MIT Climate Portal found that consumer wins are greatest where safeguards keep prices fair. At ACP, we monitor these design challenges to ensure gains reach you on the ground. For research on these effects, see our FTI Study Results page.
Long-Term Wins: Two Decades of Evidence
Over twenty years of competition have reshaped the industry. Diversegy’s historical review backs this up. The numbers tell a clear story:
Lower Rates: Restructured states have shown significantly slower rate increases over time.
Cleaner Air: Competitive markets have retired coal faster and integrated renewables at nearly double the rate of monopoly states.
Better Reliability: Competitive regions have seen roughly 5% fewer outages on average.
Want to see how that translates to real lives? Swing by our Video Library and hear stories from families and businesses in states like Ohio or Maryland.
FAQ: Your Big Questions, Answered
How does deregulation save me money? By letting companies compete for you, leading to lower prices and risk shifting away from ratepayers.
Does competition help the environment? Absolutely. Competition rewards efficiency, making cleaner sources like solar and wind more attractive to providers.
Where can I see my options? Use this interactive map to see if your state offers retail choice.
Affordable, reliable, and consumer-first energy is where we’re heading. At ACP, we’re committed to championing policies that keep your interests at the center.
