Deregulated electricity and natural gas states for businesses
Where a commercial or industrial company can buy electricity or gas from a competitive supplier, which grid each state sits in, where brokers must be licensed, and what to do in states without choice.
About 19 states and the District of Columbia allow at least some commercial and industrial customers to buy electricity from competitive retail suppliers, according to the U.S. Energy Information Administration, and in the ERCOT region of Texas customers of investor-owned utilities must choose a retail provider. Large commercial and industrial customers can buy natural gas from a supplier in most states through the utility's transportation service. Discovery Energy Utility Audits buys electricity and gas for multi-site companies in the deregulated states and audits utility bills in every state.
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States with competitive electricity supply for businesses
The table lists the states where commercial and industrial customers of the main investor-owned utilities can choose an electricity supplier, the grid operator that sets wholesale prices and capacity costs, and whether brokers are licensed or registered there. Municipal utilities and cooperatives are usually outside retail choice even in these states. Each state links to its page in Discovery's U.S. electric utility directory, which lists every utility in the state. Ohio, Pennsylvania, Illinois, New Jersey, Maryland, Texas and Connecticut also have full buying guides covering utilities, default service, capacity costs, natural gas and licensing.
| State | Grid operator | Business electricity choice | Broker or consultant rules |
|---|---|---|---|
| Connecticut (utilities) | ISO-NE | Yes | Registration with PURA |
| Delaware | PJM | Yes (Delmarva Power territory) | Electric supplier certificate (broker) from the Delaware PSC |
| District of Columbia | PJM | Yes | Electricity supplier license from the DC PSC, which covers brokers and aggregators |
| Illinois (utilities) | PJM (ComEd), MISO (Ameren Illinois) | Yes | Agent, broker and consultant license with the ICC |
| Maine | ISO-NE | Yes | License as a competitive electricity provider from the Maine PUC, which covers brokers and aggregators |
| Maryland (utilities) | PJM | Yes | Broker license with the Maryland PSC |
| Massachusetts | ISO-NE | Yes | Broker license with the DPU |
| Michigan | MISO | Limited: retail open access is capped at about 10% of each utility's load, with waiting lists | Alternative electric suppliers licensed by the Michigan PSC; ask brokers how they are registered |
| New Hampshire | ISO-NE | Yes | Registration with the NH PUC |
| New Jersey (utilities) | PJM | Yes | Energy agent registration with the BPU |
| New York | NYISO | Yes | Registration and fee disclosure (Public Service Law §66-t) |
| Ohio (utilities) | PJM | Yes | Certification with the PUCO |
| Pennsylvania (utilities) | PJM | Yes | Licensed as electric generation suppliers by the PA PUC |
| Rhode Island | ISO-NE | Yes | Registration with the RI PUC |
| Texas (utilities) | ERCOT | Yes in competitive ERCOT areas (Oncor, CenterPoint, AEP Texas, TNMP); customers there must choose a retail provider | Registration with the PUCT |
| California | CAISO | Limited: Direct Access is capped | Electric service providers register with the CPUC |
| Oregon | None (bilateral West) | Limited: direct access for nonresidential customers of the two investor-owned utilities, within program limits | Electricity service suppliers certified, and aggregators registered, by the Oregon PUC |
| Nevada | None (bilateral West) | Limited: large customers may leave the utility with commission approval and exit charges | Check with the PUCN |
| Virginia | PJM | Limited: mainly large customers, under conditions set by state law | Competitive service providers and aggregators licensed by the SCC |
Rules change. Program caps, eligibility thresholds and licensing requirements are set by each state commission, so confirm them for each account before you plan a purchase, and ask any broker you hire for its license or registration in each state. Michigan's program has been at or near its 10% cap at every participating utility, so new customers join a queue; in Virginia, retail choice for most customers ended in 2009.
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Natural gas: transport service and choice programs
Gas works differently. Large commercial and industrial customers have been able to buy gas separately from delivery for many years in most states, usually under the utility's transportation tariff, which sets the minimum volume, metering and balancing rules. Many states also run choice programs that let smaller businesses and households pick a gas supplier. In the Atlanta Gas Light territory in Georgia, every customer buys gas from a marketer.
Before planning a gas purchase for a site, check three things in its utility's tariff: the transport eligibility threshold, the balancing and imbalance rules, and whether firm and interruptible service are available. Discovery's natural gas procurement page explains each, and the gas capacity outlooks rate winter delivery capacity in 48 metros.
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Why the grid operator matters as much as the state
Two deregulated states can price electricity very differently because their grid operators run different markets. In PJM, capacity is bought in a forward auction and charged through each account's peak load contribution; the 2028/2029 auction cleared at the $325 per MW-day cap. In MISO, the seasonal auction set annualized prices of $116 to $126 per MW-day for 2026/27. ERCOT has no capacity market, and transmission follows the four summer peak intervals. A procurement plan for a multi-state company is really a plan for each grid. See charges by market.
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What to do in states without choice
In most of the Southeast, the Mountain West and much of the Midwest, the utility sets the price through its tariff and there is no supplier to switch to. Savings there come from checking how the tariff is applied: the rate class, riders and exemptions, demand ratchets, power factor, meter multipliers and seasonal rates. A utility bill audit tests every account against the tariff and recovers past overcharges, within a look-back set by each state; see utility refunds by state. A free rate class check is the quickest first step.
A multi-state company usually needs both: procurement in deregulated states and a tariff audit everywhere. Discovery runs both on one account inventory, which is why the multi-state RFP and the audit start from the same list of accounts.
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Questions about deregulated states
Which states have deregulated electricity for businesses?
Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and the competitive areas of Texas offer broad choice to commercial customers. California, Michigan, Nevada, Oregon and Virginia allow limited choice.
Can a business choose its natural gas supplier?
Large commercial and industrial customers can in most states, through the utility's transportation service. Smaller businesses can in states with gas choice programs.
Does deregulation mean lower prices?
It means competition for the supply portion. The utility's delivery charges stay regulated, and the supply price still follows wholesale markets, including capacity costs. Buying well, and on the right terms, is what lowers cost.
Do brokers need a license?
In several states, yes. Pennsylvania, Texas, Ohio, New York, Illinois, Maryland, Massachusetts, New Jersey, Delaware, the District of Columbia, Maine and Virginia, among others, license or register brokers, consultants or aggregators. Ask any broker for its license in each state where it will act for you. Discovery Energy's energy broker licenses and registrations are held by Energy Auction Exchange, LLC.
Sources
- US EIA, Today in Energy, Participation in electricity customer choice programs has remained unchanged since 2013, 19 states and DC allowing some commercial and industrial customers to choose.
- US EIA, Can customers choose their electricity supplier?, ERCOT customers of investor-owned utilities must choose.
- US EIA, Natural gas customer choice programs
- New York Public Service Law §66-t, broker and consultant registration and disclosure.
- Pennsylvania Public Utility Commission, Electric Generation Supplier application resources
- Public Utility Commission of Texas, Broker registration and reporting
- PJM, 2028/2029 Base Residual Auction results (July 14, 2026)
- American Public Power Association, MISO 2026 Planning Resource Auction
- Delaware PSC, Order No. 7981, Electric supplier certificate (broker), brokers treated as electric suppliers under 26 Del. C. §1001.
- 15 DCMR Chapter 46, Licensure of electricity suppliers, an electricity supplier includes aggregators, brokers and marketers.
- Maine PUC, Licensing and contracting, suppliers, marketers, aggregators and brokers must be licensed.
- Michigan PSC, Electric choice program remains fully subscribed in 2025, programs at or near the 10% cap.
- California PUC, How to register as an electric service provider
- Oregon Administrative Rule 860-038-0380, Aggregation, and 860-038-0400, Electricity service supplier certification.
- Virginia SCC, Competitive service providers and aggregators, licensing of suppliers and aggregators.
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