In a landmark analysis of the Southeastern United States’ power sector, a newly unveiled competitiveness dashboard from researchers at Duke University offers a starkly divided picture of the region’s energy markets. This comprehensive evaluation of twelve states positions Virginia as the leader in fostering a competitive electricity environment, while Alabama is ranked at the very bottom. The new tool provides an invaluable, structured framework for comparing state-level energy policies, market structures, and consumer-centric regulations, delivering critical insights for policymakers, regulators, and industry stakeholders aiming to navigate the complexities of the modern energy transition. This inaugural ranking sets a new benchmark for understanding which states are empowering customer choice and which are reinforcing monopolistic control.
A New Barometer for Market Health
The foundation of the new ranking system is a multi-faceted methodology designed to holistically measure the degree of competition and consumer choice within each state’s power sector. The dashboard scrutinizes a series of key indicators, beginning with whether a state participates in an organized wholesale power market, such as a regional transmission organization (RTO) or an independent system operator (ISO), which are known to foster broader competition among generators. It also evaluates the robustness of net metering policies that fairly compensate residential and commercial customers for the excess solar energy they contribute to the grid. Further metrics include the presence and authority of an official state consumer advocate office, the quality and accessibility of statewide interconnection standards for new energy projects, the implementation of competitive procurement requirements for new generation capacity, and the legal framework governing third-party power purchase agreements, which can open the market to new players. This comprehensive approach moves beyond simple price comparisons to assess the underlying structural health of each market.
To present its findings clearly, the research team categorized the twelve Southeastern states into five distinct tiers based on their aggregate scores from the various competitiveness metrics. This tiered structure is intended to group “batches and possibly peer states” together, allowing for more effective and relevant comparisons. Tier 1, representing the most competitive markets, includes Virginia, West Virginia, and Kentucky. Following them in Tier 2 are Arkansas and Louisiana. The middle of the pack, Tier 3, is the most crowded, containing Mississippi, North Carolina, Florida, and South Carolina. Just below them, in Tier 4, are Georgia and Tennessee. Finally, standing alone in Tier 5 as the least competitive power market in the entire region is Alabama. This hierarchical arrangement not only ranks the states but also illustrates the significant policy and structural divides that exist across the Southeast, creating distinct clusters of market environments that range from relatively open to deeply entrenched and non-competitive.
The Wholesale Market Advantage
A central and overarching trend that emerged from the analysis is the profound advantage held by states that participate in organized wholesale markets. The top three states—Virginia, West Virginia, and Kentucky—are all active members of either the PJM Interconnection or the Midcontinent Independent System Operator (MISO), two of the nation’s largest RTOs. Researchers emphasized that this participation is a “fairly significant element of competitiveness.” RTOs and ISOs create a large, unified marketplace where electricity generators must compete against one another to sell their power, a dynamic that can drive down costs for consumers and enhance grid reliability by optimizing resources over a vast geographic area. This structure fundamentally changes the power dynamic from one dominated by a few vertically integrated utilities to a more open, competitive playing field where efficiency and low costs are rewarded. The data suggests that membership in such an organization is one of the single most impactful factors in a state’s overall competitiveness score.
The strong performance of the PJM and MISO member states casts a harsh light on a major structural barrier hindering the rest of the region: the Southeast currently lacks its own dedicated RTO or ISO. This absence makes it difficult, if not impossible, for states in the southern part of the region to access the benefits of a competitive, organized wholesale market. Without an RTO, these states largely rely on a fragmented system of bilateral contracts between individual utilities, which limits competition, reduces transparency, and can stifle the development of independent power producers, particularly those focused on renewable energy. This fundamental structural difference creates a clear dividing line within the Southeast, with the northern states reaping the rewards of market integration while their southern neighbors remain constrained by traditional, less competitive utility models. This highlights a critical policy question for the region regarding the potential formation of a “Southeast RTO” to unlock similar benefits for the lagging states.
Nuances and Paradoxes in the Rankings
Despite its commanding lead in the overall rankings, Virginia’s performance illustrates the nuanced and often contradictory nature of the findings. The state scored highly on several key policy fronts, earning praise for having an approved utility green tariff program, a dedicated state consumer advocate office, a requirement for limited competitive procurement for renewable energy, and, most importantly, its crucial participation in the PJM wholesale market. However, a deeper dive into the data revealed a significant and troubling weakness: an extremely high level of market concentration. Using the Herfindahl-Hirschman Index (HHI), a standard antitrust metric, researchers found Virginia’s utility sector to be highly concentrated. The state’s customer concentration HHI score was 4,475, and its generation concentration score was 3,540, both of which vastly exceed the 1,800-point threshold that signals a non-competitive market. This outcome is largely attributed to the overwhelming dominance of Dominion Energy, a monopoly utility serving nearly the entire state.
Conversely, Alabama, which was ranked last overall, demonstrated an interesting paradox that underscores the complexity of evaluating energy markets. The state received negative scores on most indicators, including its lack of statewide interconnection standards, its absence from any wholesale market, the lack of a formal requirement for competitive solicitations for new power generation, and the non-existence of a net metering policy for solar customers. Its few positive marks came from permitting municipal utility ownership and having a state consumer advocate office. However, when it came to market concentration, Alabama’s HHI scores were notably better than Virginia’s, with a customer concentration score of 3,210 and a generation concentration score of 2,686. While still considered highly concentrated, these figures are significantly lower than those of the top-ranked state. This highlights what researchers described as the “heterogeneity of the results,” where even a leading state can score poorly on certain critical metrics and a lagging one can show relative strengths.
Future Horizons for Southeastern Energy
The release of this inaugural dashboard established a foundational tool for a more transparent and data-driven conversation about the future of the Southeast’s power sector. Looking ahead, the research team identified several key areas for expansion. Future iterations of the dashboard were planned to delve into more granular aspects of the energy market, such as the dynamics and policies governing interconnection queues, which are critical bottlenecks for the deployment of new renewable energy projects. There was also consideration for developing metrics to measure levels of public support and opposition for new generation and transmission infrastructure, as well as analyzing permitting lag times and processes. This ongoing work aimed to provide an even richer, more detailed understanding of how market structures and state policies impact the evolution of the power sector. The ultimate objective was to investigate the causal relationship between these competitiveness metrics and the ultimate outcomes of public interest, such as consumer welfare, electricity costs, and environmental performance.
