Traditionally, utilities owned both the generating plants and distribution equipment. In deregulated electric markets, utilities don't own the power plants, but instead purchase power for their consumers. In addition, consumers like businesses and residential consumers can opt-out of the utilities' purchases and buy their own electricity to be delivered over the utility grid.

A controversial topic, as some say electricity deregulation drives up prices and consumer costs due to market manipulation and excessive build out of transmission lines. But it also incentivizes power plant operators to be more efficient, as traditional regulated-utilities have less incentive to build highly-efficient power plants as they are guaranteed a rate of return by regulators.

Deregulated states tend to have higher electricity prices, but also less coal, especially older inefficient dirty coal plants. But they also had higher electricity prices before deregulation, and generally tigher environmental regulation.