Competition is a key driver in strengthening power grids and for fostering a clean energy future. The competitive landscape characterizing the electricity systems in each U.S. state was analyzed by University of Texas researchers to assess progress in this area.

Each state was scored based on 10 different factors related to a wide range of issues to determine competitiveness, including the existence of wholesale and retail electricity markets, requirements for request for proposals in vertically integrated states, data access policies for customers and third parties, compensation policies for distributed generation, and the percentage of power plants that are privately owned.

Connecticut, Illinois, Maine and Ohio are the only states with electrical grids that have an A grade for energy competitiveness, with 28 states falling in the D or F range. Deregulated states with wholesale and retail markets for all customers, including residential, ranked high as well. Conversely, Alaska, Alabama and Tennessee were the lowest-scoring states, and most other fully regulated states with monopoly utilities also ranked low. All but four states have policies that compensate distributed generation, typically through net-metering.

Figure showing which parts of the U.S. have wholesale power markets (left) and which states have retail choice for customers. Source: U.S. Federal Energy Regulatory Commission

The scores were roughly skewed toward the lower end and demonstrated that states that are part of deregulated wholesale electricity markets and have retail choice for customers tended to score the highest. States lacking performance incentive mechanisms for utilities or any sort of compensation programs for distributed generation owners also did not tend to fare well in any other competition metric and tended to score lower overall.

The data can also be visualized with this interactive mapping tool.