Number of natural gas customers participating in customer choice programs is increasing

Eligibility and participation in customer choice programs, which allow residential and commercial customers to purchase natural gas from nonregulated energy suppliers, have increased over the past 12 years. The number of eligible customers has more than doubled since 2001, and is nearly 10% higher than it was in 2005. Participation in customer choice programs has also more than doubled, increasing from 3.3 million in 2001 to 7 million in 2013. However, it has grown at a slower rate in more recent years, and at the national level, only 18% of residents eligible to participate in consumer choice programs chose to do so in 2013.

Customer choice programs were developed in 1990s to increase competition in retail electricity and natural gas markets. These programs are implemented at the state level and vary by size, scope, and participation. Customers become aware of consumer choice programs through advertising, outreach, or when relevant legislation is on the ballot.

For natural gas, large commercial and industrial consumers have had the option of purchasing the natural gas commodity separately from delivery services for many years. Participation in residential programs, which increased in the early 2000s, has largely leveled off in recent years.

The 2013 shows the status of eligible and participating residential customers by state in customer choice programs in the calendar year. The data show the number of residential customers in a state, those customers eligible for a customer choice program, and those customers participating in the programs.

Nationwide, 24 states and the District of Columbia had natural gas residential consumer choice programs in 2013. In 2001, 20 states and the District of Columbia allowed residential and other small-volume gas users to purchase natural gas from someone other than their traditional utility company.

Ohio (35% of national total), Georgia (20%), and New York (13%) customers make up about 69% of nationwide customer choice program participants. Georgia, with nearly 100% participation, has remained steady since 2001 as all customers of Georgia’s largest utility, Atlanta Gas Light, participate in the state’s choice program. New York has had participation rates greater than 20% since 2011.

Ohio, with a participation rate of almost 79%, offers a state-funded to provide information about consumer choice. This website, referenced on customers’ bills, along with a state-funded outreach program, contributed to participation growth. Ohio is one of the few states that have grown in participation in recent years. Websites like this are helpful in times when customers have contracts that expire and want to compare prices through an unbiased source.

Principal contributor: John Stephens