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After hitting a high in 2014, the number of electricity consumers participating in residential retail choice programs has been declining, a new federal report found.
The Energy Information Administration looked at 13 states and the District of Columbia where the option is available to buy electricity directly from an energy supplier and have it delivered by the local utility.
In 2014, EIA said 11.4 million residential customers took part in retail choice. But that fell to 10.3 million in 2015 and 10.2 million in 2016, the latest year for which EIA has figures.
Electricity Monthly Update released July 24, EIA said the largest recent decline was in Illinois, which "had one of the highest growth rates in retail customer choice among residential customers between 2009 and 2013." That was credited to a steep drop in natural gas prices, as well as municipal aggregation, in which a municipality negotiates competitive electricity rates from retail power marketers for large groups of customers within the municipality.
So what happened? The polar vortex of January 2014.
That led FirstEnergy Solutions, a major retail power marketer in both Illinois and Ohio, to announce plans for a one-time polar vortex surcharge of $5 to $15 for residential customers in both states. The company ultimately changed course, but "the announcement was unpopular and resulted in retail choice customers switching back to their full-service providers in Ohio and Illinois," EIA said.
"As of 2016, retail choice providers service 38.8 percent of total residential customers in Illinois, down from their peak of 57.3 percent in 2014," the report said.
But EIA found that in Rhode Island, the number of residential retail choice customers increased by 846 percent from 2012 to 2016.
"Although the growth peaked in 2014 and has declined somewhat since then, the state still has had one of the most consistent upward trends in retail choice penetration rates, moving from 1.1 percent of total residential customers in 2012 to 10.7 percent of total residential customers in 2016," the report said. It also noted a contributing factor could be that "the cost of electricity in the state was the fourth highest in the country in 2016 at 18.62 cents/kWh."
EIA excluded Texas data from its article because the state's retail choice program is mandatory in the part of the state operated by the Electric Reliability Council of Texas.