A relevant market reflects the zone of consumer choice for a good or service. Today, the zone of consumer choice for retail electricity is basically limited by law to a single provider per service territory and a single, bundled product. The costs of all generation products and services are averaged into a bundled price together with the costs of transmission and distribution. Thus, each incumbent retail provider currently has a monopoly share of retail generation sales in each service territory and this is the beginning point or baseline for identifying the geographic area of the zone of consumer choice for retail generation services. If Utah law permitted competitive retail providers of generation services, the zone of consumer choice would expand to include supply of competitively-priced and available products by providers other than the incumbent provider.
Substitutability is at the heart of defining the zone of consumer choice.
Therefore, variations in price indicate distinctions in product markets and geographic markets. In the short run, most consumers have no or few substitutes and therefore very little ability to respond to price changes. This fact allows firms to raise price substantially above competitive cost even in relatively unconcentrated markets. Control over price varies depending on consumers' choice of substitutes. For example, use of electricity changes by the time of day, day of week, and time of year as well as by type of user.