US Electricity Markets 101
by Kathryne Cleary and Karen Palmer
The complete report, which was published in February 2020, is available at https://www.rff.org/publications/explainers/us-electricity-markets-101/
In the United States, how electricity is bought and sold varies by region of the country. While many cities, including Austin, Los Angeles, and Nashville are served by municipally owned utilities and some rural areas are served by customer-owned rural cooperatives, the majority of electricity customers are served by utilities that are owned by investors.
These investor-owned electric utilities can be either regulated and operate as vertically integrated monopolies with oversight from state public utility commissions, or they can operate in deregulated markets where electric energy prices are set by the market with some federal oversight of wholesale market operations. These regulatory constructs determine how retail