An analysis of federal data found a wide price gap favoring regulated states. The findings contrast with Mike Mazzei’s call for more competition.
OKLAHOMA CITY — Competition is supposed to lower prices. A new report argues electricity may be a costly exception.
Power for Tomorrow, a trade association that advocates for regulated electric utilities, analyzed state-level average residential prices published in the federal Electric Power Monthly and found that customers in deregulated states paid substantially more for electricity in 2025.
Its report, The Deregulation Price Premium, said residential electricity averaged 23.41 cents per kilowatt-hour in deregulated states in the contiguous United States, compared with 14.60 cents in regulated states — a difference of 60.4%.
Prices also increased faster in deregulated states, rising 7.4% from 2024 to 2025, compared with 4.4% in regulated states, according to the report.
At 13.12 cents per kilowatt-hour, regulated Oklahoma ranked 43rd — or ninth-lowest — among the 50 states and Washington, D.C.
Mazzei calls for more competition
The findings add new data to a utility policy dispute that surfaced during Oklahoma’s Republican gubernatorial runoff.
During the Aug. 3 debate with Attorney General Gentner Drummond, Mazzei was asked what he would do about increasing electric bills. He said his administration will look towards deregulation.
“I will be opening up Oklahoma’s competitive markets for free market capitalism,” Mazzei said. “That’ll bring energy prices down.”
Mazzei did not explain whether he was proposing retail electric choice, competition among power generators, changes to utilities’ exclusive service territories or another model.
That distinction matters because the report defines deregulation as restructuring electricity systems around competitive generation markets, often separating power generation from the utilities that deliver electricity. Oklahoma retains a regulated system in which investor-owned utilities own generating plants and charge rates approved by the Oklahoma Corporation Commission.
Electricity does not operate like most consumer markets. Supply must continuously match demand, customers cannot readily substitute another product when prices rise, and power plants and transmission systems require large investments and years of planning.
Power for Tomorrow argues that regulation shields customers from some market volatility by allowing regulators to review utility investments and determine which costs may be recovered through rates.
What the data show — and don’t
The comparison does not prove deregulation caused the entire price gap. It relies on state averages and does not control for other factors affecting electricity prices. It does, however, establish an association between market structure and prices.
Other research has raised similar questions about whether competition delivers the promised savings in electricity markets.
A 2022 working paper from the MIT Center for Energy and Environmental Policy Research found that deregulation produced modest reductions in generation costs but that increased wholesale markups more than offset those efficiencies. The researchers concluded that prices increased more in deregulated markets relative to comparable regulated utilities.
The report presents a direct challenge to the proposition that more electricity competition necessarily means lower bills. Whether it directly conflicts with Mazzei’s proposal depends on what kind of competition he would pursue as governor.
