US Electricity Markets 101: All You Need To Know How Electricity Prices Are Set In The US | WHAT REALLY HAPPENED

US Electricity Markets 101: All You Need To Know How Electricity Prices Are Set In The US

In the United States, how electricity is bought and sold varies by region of the country. While many cities, including Austin, Texas, Los Angeles, California and Nashville, Tennessee are served by municipally owned utilities and some rural areas are served by customer-owned rural cooperatives, the majority of electricity customers in the use 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 and wholesale electricity prices are set and how power plants are procured. This explainer discusses the different types of US electricity markets, how they are regulated, and implications for the future given ongoing changes in the electricity sector.

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