"Our economy is built around competitive markets, and we need to bring the full advantages of that model to electricity customers," says Thomas Rawls, director of the alliance. "Customers in Texas and New York have a range of excellent choices. In many other states, customers are still waiting to get the full benefits that can be delivered by the competitive marketplace."

The group studied residential consumers in 28 states and 2 Canadian provinces. In New York and Texas, more than 3.7 million residential customers are being served by competitive suppliers. Ten other states, including Massachusetts, Connecticut, Illinois, Maryland, and Pennsylvania, have been classified as making "medium progress."

In Texas, which just lifted its price caps for residential consumers, such users can choose from more than 50 distinct products. That includes electricity from wind energy, fixed-price products for multiple years, pricing that guarantees savings in extreme summer heat, and products that encourage energy efficiency.

In New York, 625,000 or 11 percent, of residential consumers are purchasing their electricity from competitive suppliers. That translates into a 55 percent growth rate in one year. In one utility service area, customers can choose from among 37 electric rate offerings. Those choices include fixed prices, indexed, blended, and green power. Overall, 41 percent of the total electricity usage in New York is currently provided by competitive suppliers, the alliance says.

Meantime, The Brattle Group has found that over the last decade average electricity rates have increased 31 percent in both restructured and non-restructured states. While it acknowledges that average rates in restructured states are significantly higher than the rates in non-restructured states, it says that was already the case in the mid 1990s before any state had begun tinkering with its electricity market. The basic lesson is that restructuring has failed to reduce the rate differentials that existed in the mid 1990s -- but it did not make them worse, it emphases.

"To date, retail access has failed to live up to its high -- perhaps unrealistically high -- expectations," says Johannes Pfeifenberger, a principal of the Brattle Group. But "the available facts do not support a conclusion that the average customer in restructured states would have been better off under traditional cost-of- service regulation, nor that customers would necessarily benefit from re-regulation of the industry."

Fundamental Questions

To be sure, about a dozen studies examining the success of those states that have developed competitive retail markets have been performed. Those findings often conflict with each other and critics say that none mean much because they use different variables and the definition of restructuring is inconsistent. The more fundamental question is whether electricity is such an uncommon commodity that it must remain strictly regulated or whether the marketing of it can become a competitive enterprise.

A lot of state regulators and consumer groups say that the push to deregulate the electric utility sector has destabilized markets and raised rates. The Consumer Federation of America says that electricity is too valuable of a commodity to leave to the whims of the free market and particularly one that has shown it can be "gamed."

In a deregulated system, generators and transmission owners have demonstrated the ability to manipulate the market and withhold supplies to drive prices up, it says. How so? Generators and transmission owners enjoy excess profits when the price of scarce resources is bid far above their costs in tight markets. These overcharges can add 50 percent to the wholesale price of electricity, the consumer group adds.

The California energy crisis in the early part of the decade is a prime example of how deregulation can go awry. Interestingly, the state -- which suspended the option of choice for larger electric customers in 2001 -- is scheduled to take up that specific issue again. But the senate president there as well as a key committee chairman are telling utility commissioners that any changes to "direct access" laws would be "premature," noting that they might cause "chaos and uncertainty."

Proponents of free markets counter that California's failed regulatory model was an aberration and that the loopholes that allowed some power marketers to scam the system have been closed. Choice, they add, is a right that must be provided to all users who need to find ways to defray their high energy costs and to remain competitive.

"Direct access is a means of bringing about greater choice, more robust competition, creative product offerings and significant customer savings," says Andrea Morrison, regulatory affairs director of Strategic Energy, an alternative provider. "With regard to the purchase of all goods and services we believe that customer choice is a fundamental right and that any abridgement of this right, even in emergency situations, is never to be taken lightly and should be remedied as soon as possible after the crisis has passed."