CONCORD, N.H. (AP) — Ten years ago, the state decided to open up the state’s electricity market to competition, hoping to lower electric rates.

A decade later, rates are no lower, most customers still have no choice of power providers and state regulators are uncertain how to proceed. The future of the competitive power market and of Public Service Company of New Hampshire’s power plants is likewise unclear.

In the meantime, the average home electric bill has gone from $65 a month in 1998 to $79 in 2006 and only large business customers have a choice of power providers.

The state decided 10 years ago to deregulate a portion of the electric market, splitting the ‘poles and wires’ companies that carry power to homes and businesses from the power providers, companies that generate electricity or buy it wholesale and distribute it.

Utilities that did both were required to sell off their power plants. The poles and wires businesses remain regulated, but customers were supposed to get lower rates as unregulated power providers competed for a slice of the consumer pie.

But in New Hampshire, Public Service distributes electricity to about 70 percent of that pie, and other energy companies have often been unable to match the low power costs from Public Service’s own plants.

As a result, state regulators have repeatedly delayed the requirement that Public Service sell off its power plants. Meanwhile, the company has asked for permission to build more.

Electric deregulation swept the nation during the mid-1990s, and New Hampshire led the way until a lawsuit by Public Service resulted in the requirement that ratepayers bear all the “stranded costs” the utility incurred to build the Seabrook nuclear power plant.

The lawsuit delayed the implementation of deregulation. Meanwhile, energy prices soared and lawmakers were spooked by power shortages and other problems caused by deregulation in California and other states.

When a settlement allowed deregulation to proceed in New Hampshire, Public Service sold its interest in Seabrook Station, but got extensions allowing it keep operating its other plants, which are fueled by oil, natural gas, coal, hydropower or wood.

The competitive market continues to struggle and New England regulators have added extra fees into regional electric rates to encourage companies to invest in new generating plants. Doug Patch, an energy lawyer who headed the state Public Utilities Commission as it worked to implement the Legislature’s deregulation plan, said competition has been slow to develop in part because policymakers have not followed through on the divestment requirement for Public Service.

That discourages other power generators from entering the New Hampshire market, said Patch, who is now a lobbyist for TransCanada, an independent power company that owns plants in New Hampshire and sells electricity to large businesses.

Patch and some of the state’s other electric utilities testified against a bill earlier this year that would have allowed Public Service to build a wood-fired plant in the North Country without a competitive bidding process. The bill failed, but some lawmakers plan to introduce similar legislation next year.

Public Service President Gary Long said it’s “totally false” to blame his company for stunting the competition.

He said policymakers have failed to understand the market for electric power does not operate like other markets that have been deregulated successfully. In markets such as long-distance telephone service and airline travel, shortages and high prices will curb demand, driving prices down.

But people cannot live without electricity and overall demand continues to increase, pushing prices higher, he said. Meanwhile, Public Service can generate its own power for less money than the market price, he said.

State Consumer Advocate Meredith Hatfield said her office has not decided whether full divestment is best for Public Service’s ratepayers. That’s because future energy costs are hard to project, she said.

“Right now I think we’re right in the middle of trying to figure that out,” she said.

Officials from two other utilities said the surge in competition for business customers is evidence deregulation is beginning to work.

A National Grid spokesman said about 5,000 of the company’s business customers are buying power on the competitive market because they can get better rates.

George Gantz, senior vice president of Unitil, said about half the utility’s business customers are buying power on the open market and he believes competition will come to residential customers, too.

He believes it’s unfair to blame rising power prices on deregulation.

“The underlying cost of oil, the underlying cost of natural gas and the world energy market impact of Katrina a year ago – all of those things are not the fault of the competitive market,” Gantz said. “That’s just where it shows up first.”