‘Act to Allow for Consumer Regulated Electric Utilities’ (ALEC draft legislation)

By Robert Bradley Jr. -- January 15, 2026

“Consumer Regulated Electric Utilities can act just like regulated utilities, but they cannot sell or supply power to residential consumers and they must be islanded from, or not connected to, regulated electric systems.”

The new year brings new opportunities to build upon the free market reforms of 2025 by scaling back statism. This is particularly important in the area of U.S. electricity policy, where the work of Travis Fisher and Glen Lyons (Advocates for Consumer Regulated Electricity) is particularly important. [1]

Draft legislation by the American Legislative Exchange Council–“America’s largest nonpartisan, voluntary membership organization of state legislators dedicated to the principles of limited government, free markets and federalism”–must be favorably voted on by ALEC’s board of directors before becoming model policy for state legislatures.

The draft Act to Allow for Consumer Regulated Electric Utilities, voted out of ALEC’s Task Force on Energy, Environment, and Agriculture (SNPA 2025), follows.

Summary

This model policy creates a new type of electricity provider, to be called a Consumer Regulated Electric Utility.  Consumer Regulated Electric Utilities can act just like regulated utilities, but they cannot sell or supply power to residential consumers and they must be islanded from, or not connected to, regulated electric systems. 

Consumer Regulated Electric Utilities will not be considered public utilities and therefore the public utility regulator will have limited oversight.  The Consumer Regulated Electric Utilities will remain subject to all other state laws and regulations including environmental, building, and workplace safety.  Consumer Regulated Electric Utilities that propose constructing facilities using a public right-of-way will need to apply for approval through existing means.  The authority reviewing the application will limit their review to issues of public safety, environmental protection, and right-of-way restoration and storm-response plan. 

Section 1. Legislative Findings and Purpose. 

The Legislature finds that: 

1. Reliable, affordable, and sufficient electricity supply is vital to economic growth and public welfare. 
2. New industrial, commercial, and data-center developments require rapid access to electricity supplies without shifting costs or risks to existing ratepayers. 
3. It is the policy of this state to permit the creation of Consumer Regulated Electric Utilities—privately governed electricity providers serving new, nonresidential load—operating independently of the state-regulated utility system. 
4. Consumer Regulated Electric Utilities shall remain subject to environmental, safety, and workplace laws protecting the public interest, while otherwise operating outside public utility regulation. 

Section 2. Definitions. 

A. Consumer Regulated Electric Utility (CREU) means an electric generation and supply system constructed after [effective date] for the sole purpose of serving new industrial, commercial, data-center, or other nonresidential loads not previously served by any retail electric supplier. A CREU may own or operate any facilities necessary for generation, energy storage, transmission, distribution, and the supply of electricity, and may sell electricity at retail to eligible customers, provided the system is physically islanded from regulated utilities and the bulk electric system and is fully contained within this state. 

Section 3. Exemption from Public Utility Regulation. 

A CREU shall not be considered a public utility for purposes of public utility regulation. The public utility code shall not apply to a CREU except as expressly stated in this Act.  The public utility regulator shall have only the jurisdiction expressly granted in this Act. 

1. A CREU shall remain subject to other state statutes and regulations including:
   • (a) Environmental protection and permitting laws; 
   • (b) Building and fire codes; 
   • (c) Workplace health and safety standards; and 
   • (d) Storm-debris removal and right-of-way maintenance requirements for any facilities located within a public right-of-way. 
2. If a CREU elects to interconnect with a system subject to public utility regulation, it shall first obtain all approvals required under applicable law, and upon such interconnection shall cease to be a CREU and thereafter shall be subject to the public utility code and regulation by the public utility regulator to the extent prescribed by law. 

Section 4. Facilities Located within Public Rights-of-Way. 

A CREU may construct and operate facilities within existing public rights-of-way, subject to the same permitting, restoration, and public-safety requirements applicable to public utilities. 

Review of such applications shall be limited exclusively to issues of public safety, environmental protection, adequacy of right-of-way restoration, and storm-response plans. 

Section 5. Construction and Severability. 

This Act shall be liberally construed to encourage the establishment of Consumer Regulated Electric Utilities to serve new load and promote economic development. 

If any provision of this Act is held invalid, the remaining provisions shall not be affected. 

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[1] The About section of Advocates for Consumer Regulated Electricity reads:

Electricity is trapped in a century old paradigm. It’s heavily regulated and centrally coordinated. So it’s slow to change.

Demand for electricity is growing rapidly. So are the consumer requirements. No longer does a single product satisfy all consumers. Many of today’s consumers need faster access to supply and greater options. We need to break the old paradigm.

Enter Consumer Regulated Electricity (CRE): New, unregulated suppliers operating outside of the regulated grid will be able to bring the benefits of speed and innovation. CRE suppliers can supply one or bundle several new large loads, regulated only by their customers and their contractual arrangements.

Establishing CRE requires new state policy, to allow CRE suppliers to operate without oversight by the state utility regulator.