For example, suppose all customers who do not choose a supplier remain with the incumbent utility and pay for generation services at wholesale commodity prices. This is tantamount to awarding a large share of the retail market to the only seller customers have ever dealt with, at a price other retail competitors can't match. It is not likely to lead to vigorous competition in the small use commercial and residential markets. This Issuesletter will discuss each in turn. The concept of default service does not exist in ordinary competitive markets.
Every consumer buying any other product chooses a retail supplier.
There is no default provider of, for example, gasoline. Every consumer that buys gasoline chooses a retail supplier. Customers do not have the option of doing nothing, thereby having their cars filled by a default provider at a wholesale price. Of course, electricity is not gasoline. Default service, sometimes called standard service or service of last resort, is designed to meet these market and political realities.