According to a recent KEMA (Burlington, Massachusetts, U.S.) analysis, U.S. retail power competition experienced marked progress in 2003. More than 52,000 MW of estimated peak electricity demand is now being competitively served, an increase of 12,000 MW over the past 12 months and 35,000 MW since the California energy crisis subsided in 2001. The 52,000 MW represents 7% of the approximately 720,000 MW of total U.S. peak summer demand.

“Competition in power markets, primarily for large buyers, continues its rapid advance,” says Taff Tschamler, director of the KEMA's Retail Energy Markets advisory service. “Although the momentum to open up new markets has stopped since California, those that are already open have resulted in substantial and growing market activity. Reforms expected in several open markets over the coming year or two are likely to further accelerate competition across the United States.”

The Texas market leads the country in terms of customer load migration, new entrants and choice of competitive offers. Of the 52,000 MW switched in the competitive markets nationwide in 2003, Texas accounted for approximately 17,000 MW. By comparison, Illinois, California, New York, Pennsylvania and Ohio each accounted for more than 3000 MW.

The growth in customer participation is occurring in conjunction with an increase in the number and the market share of new entrants. Over the past year, more than 20 firms have entered competitive retail power markets, while the top five competitive providers now serve between 2500 to 10,000 MW of customer peak demand, equivalent to a mid- to large-sized regulated U.S. utility.

“Although some individual firms continue to struggle, the overall financial health of competitive providers has unquestionably improved over the past two years as the scale and scope of these organizations increases, and they gain experience and build infrastructure to profitably compete for customers,” said Tschamler.
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