In the mid-1990s, a number of states moved to restructure portions of the retail electricity industry. Aiming to lower costs by stimulating competitive markets for the generation portion of customers' bills, these states moved away from the traditional model in which state regulators set the retail prices for power.
Today, 18 states and the District of Columbia have adopted programs for retail electric competition. Competitive models vary by state. For example, only large customers have access to competition in Nevada, Oregon, and Virginia.
The differences in approach reflect each state's unique circumstances, including current and historic electric rates, the availability and cost of different fuels, purchased power contracts, environmental policies, and state and local taxes.