Consumers in areas of North America that have opened their electricity markets to retail competition have seen a surge in product and service innovations compared with consumers in areas where electricity remains a commodity delivered by monopoly providers, according to the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS), a report released by energy industry consultant Distributed Energy Financial Group LLC (DEFG).

The report, which serves as a "report card" for the choices available to electric customers, shows Texas (#1) and Pennsylvania (#2) as the top states when it comes to providing residential electric customers with choices to lower their electric rate.

"The robust levels of choice, competitive and innovation in Texas have also helped drive retail electric price offers to among the lowest available in the United States," the report finds.

"In Texas we refuse to rest on our laurels and have every intention of remaining number one by continuing to add features in our nation's leading electricity market," said Donna L. Nelson, chairman of the Public Utility Commission of Texas. "We keep finding ways to increase customer value in the marketplace through smart grid innovations and ongoing improvements in the shopping experience, just to name a few."

According to the DEFG report, retail electricity competition grew in 2012 at an even more aggressive pace than in 2011. "Competition has prompted retail energy providers to deliver lower prices and a greater number of innovative energy offers for consumers. The overall results include record numbers of customers engaged and a better alignment of customers with the services they prefer. For commercial and industrial customers, retail competition also continues to mean better global competitiveness," said Nat Treadway, DEFG managing partner and lead author of the report.

The report notes that, "Texas continues to see a surge in consumer-driven product and service innovation," as a result of electric choice. "New smart grid infrastructure investments -- advanced meters, mobile communications and control devices, and in-home usage displays -- allow entrepreneurial retail energy suppliers to develop innovative pricing and service choices."

"Consumers now have more choices, more information and better ways to control their energy bills. The Texas electric market is seeing several related innovations such as: more time-of-use rates, more prepaid energy choices, and more energy management devices and services. Additional innovative product launches are expected moving forward," the report notes.

For both Texas and Pennsylvania energy, more than 40 electric providers now compete for residential customers' business, driving down electric rates.