The U.S. competitive retail power market will grow at an annual rate of 8% through 2009, from approximately 300 terawatthours (TWh) at the end of 2003 to approximately 475 TWh by the end of 2009, KEMA Inc. projects in a new report. This compares to growth of over 100% from 2001 to 2002 and 16% from 2002 to 2003.

In its recently published Retail Outlook report, KEMA said the projected growth is expected to come from a substantial increase in participation by business customers in roughly a dozen states.

KEMA’s projections were conducted under three scenarios — a base case, a high case and a low case. In addition to the base case projection, KEMA projects approximately 350 TWh will switch to an alternative supplier by the end of 2009 in its low case and 750 TWh in its high case, reflecting the high level of regulatory uncertainty in several states.

KEMA’s analysis provides annual sales projections at the utility and state level for residential and business customers.

Key findings from the analysis include:

KEMA said the growth in customer participation is occuring in conjunction with an increase in the number and the size of competitive suppliers. Over the past year, more than 25 firms have entered competitive retail power markets, while the top five competitive providers now serve between 2,500 MW and 10,000 MW of customer peak demand, equivalent to a mid- to large-sized regulated U.S. utility.

“There’s been a rapid growth of diversity among new entrants over the past few years, in terms of ownership, firm size, product offers and financial performance,” said Taff Tschamler, director of KEMA’s retail energy markets advisory service. “By contrast, only a handful of firms have exited the market compared to three or four years ago. This reflects a transition from early dysfunctional markets to a more sustainable environment of customer choice and competition.”

KEMA estimates that the top 10 competitive retail electric providers serving the commercial and industrial market are:

For more information about KEMA’s retail energy markets advisory service, contact Tschamler at (720) 241-0168 or e-mail him at

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