Residential electricity costs in deregulated US states are 60% higher than in regulated ones
Executive summary: A report released by Power for Tomorrow indicates that residential utility customers in deregulated states paid an average of 60% more for electricity in 2025 than those in regulated states. The widening price gap suggests that market deregulation in the power sector may be leading to higher cost-of-living burdens for consumers without clear evidence of mitigated risks.
Who is involved: Power for Tomorrow, residential utility customers, US state regulators.
Likely next: Increased political scrutiny of energy market structures and potential legislative debates regarding utility regulation models.
A new report by Power for Tomorrow reveals a significant pricing disparity in the US energy sector, where deregulated markets are driving up consumer costs. As of 2025, residents in deregulated jurisdictions face a 60% average premium compared to those in traditionally regulated states, a gap that shows an increasing trend.
What's next — scenarios
Base: Continued widening of the price gap (50%)
Consumers in deregulated states face escalating energy bills, potentially increasing demand for energy efficiency technologies.
- Annual electricity price reports showing >5% divergence growth
Upside: Regulatory pivot toward re-regulation (30%)
States may introduce new oversight or return to regulated utility models to protect consumers.
- New state-level energy legislation in major deregulated states
Downside: Market volatility increases (20%)
Deregulation leads to even higher price spikes during peak demand periods.
- Extreme weather events coinciding with high price volatility in deregulated zones
What to watch
- State utility commission rulings on rate hikes
- Federal energy policy shifts regarding market competition
- Consumer spending data related to utility costs
Timeline
- — Shanghai Chengwei Semiconductor Equipment Launches High Precision Laboratory Central Gas Supply System (PR Newswire)
- — Report: The Electric Deregulation Price Premium (PR Newswire)
- — Dangote's Kenya Refinery Project Launches This Week at Up to $20B (OilPrice)
Analysis — what this means
Sectors affected
- Residential Utilities
- Energy Policy
- Consumer Goods
Regulatory implications
- Increased scrutiny of deregulated market mechanisms by public utility commissions