Understanding Consumer Regulated Electricity: A New Approach to Power

As electricity demand continues to grow across the United States—driven largely by data centers, artificial intelligence operations, and expanded industrial facilities—a new concept is gaining attention in energy policy discussions: Consumer Regulated Electricity, or CRE.

Understanding Today’s Electricity Markets. Before exploring CRE helps to understand how electricity markets currently work. The United States has 2 main types of electricity markets, both overseen by the Federal Energy Regulatory Commission (FERC).

Regulated wholesale markets feature vertically integrated utilities that handle everything from generating power to delivering it to your home. These utilities are monopolies in their service areas, with state public utility commissions approving their decisions about power sources and rates.

Restructured (deregulated) wholesale markets separate electricity generation from delivery. In these markets, independent system operators (ISOs) and regional transmission organizations (RTOs) manage the competitive process where different power suppliers bid to generate electricity.

What Is Consumer Regulated Electricity?

Consumer Regulated Electricity represents a departure from both traditional models. CRE would create a new category of electricity provider that operates independently—building and running their own generation, transmission, and distribution systems for specific large customers.

The defining characteristics of CRE include:

• Islanded systems: Completely disconnected from the existing regulated grid
• Large-load focus: Serving only new, large non-residential customers like data centers and manufacturing facilities
• No residential service: Prohibited from serving homes or small businesses
• Contractual regulation: Governed by agreements between provider and customer rather than state utility commissions
• No ratepayer impact: Because they’re separate, these systems wouldn’t affect costs or reliability for existing utility customers

Why Is This Idea Emerging Now? Proponents of CRE argue that the traditional regulatory system has become too slow for today’s rapidly growing electricity needs. Large industrial users often face delays of several years and high upfront costs when trying to connect to the existing grid.

Advocates describe CRE as enabling speed and innovation—allowing new suppliers to serve large loads quickly, regulated only by their customers and contractual arrangements.

For state policymakers, supporters frame CRE as a no-cost economic development approach. Rather than offering tax credits or subsidies to attract new industries, states could simply allow these independent systems to develop.

Recent Developments: New Hampshire became the first state to enact CRE legislation in August 2025 with House Bill 672. The law creates “off-grid electricity providers” that can generate, transmit, distribute, or sell electricity without connecting to the existing grid. These providers are exempt from typical utility regulations as long as they remain completely independent and don’t cross state boundaries or public rights-of-way.

Federal interest is also emerging. The DATA Act would exempt new, physically isolated off-grid electricity providers from certain federal regulations.

Model legislation from the American Legislative Exchange Council (ALEC) was adopted in late 2025, providing a template for other states considering CRE.

Different Perspectives on CRE

Supporters emphasize several potential benefits:

• Faster development of power supplies for growing demand
• Encouragement of innovation in generation technologies
• Direct customer control over their electricity needs
• Relief of pressure on the public grid without affecting residential rates
• Economic development opportunities without taxpayer subsidies

Traditional utilities and some critics raise concerns about:

• Potential loss of revenue from serving large new customers
• Questions about whether large users should contribute to broader grid infrastructure
• Long-term implications of creating parallel electricity systems

What Does This Mean for You?

If you’re a residential customer or small business owner, CRE would not change how you receive power. You would continue to get electricity from your current utility through the existing grid. CRE is specifically designed to address new, large-scale industrial and commercial demand separately from the systems serving homes and everyday businesses.

Looking Ahead

As electricity demand continues to grow—particularly from technologies requiring substantial power—states are exploring various approaches to meet these needs. CRE represents 1 potential solution as policymakers balance economic development goals with concerns about electricity costs and grid reliability.

Whether CRE becomes widespread or remains limited to specific situations will depend on implementation experiences in early-adopter states, ongoing policy debates, and how effectively it addresses both infrastructure needs and broader energy policy goals.