Currently, is residential choice a real option? If not now, when?


Residential choice is probably not a real option at the present time, given the lack of suppliers willing to service small customers.

It is conceivable that the small customer market could open up in time, and bring some benefits to those customers. Factors that could favor customer choice include the development of lower-cost advanced meters and interactive load controls for small customers, and greater seasonal and daily variations in wholesale market prices, which could together make real-time pricing economical.

Another factor could be the development of customer aggregation, which would reduce customer acquisition costs for marketers. These developments might emerge in the next five to ten years; although there is also a considerable risk that they might not.

A negative factor that is currently inhibiting retail competition is the malfunctioning of wholesale power supply markets. California is the obvious example, but market power has also raised prices in states with more mature wholesale markets like those in New England, and in the mid-Atlantic states in the PJM pool. And in the Mid-West and elsewhere, there have been price spikes.

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