One of the country's biggest utilities, American Electric Power, has expanded its investment in competitive electricity markets, buying alternative electricity provider BlueStar Energy.

Columbus, Ohio-based AEP already owns its own subsidiary electricity provider, AEP Retail Energy, given that the the company operates in several states with electricity deregulation policies.

Texas is one of the key states for competitive electricity prices nationwide, while others like Michigan and Ohio are slowly expanding theses policies. With the growing competition in these states, the company felt it necessary to expand its offerings in terms of electricity providers as well as other services.

BlueStar fills this need on both counts, providing electricity as well as energy efficiency services to help businesses cut down on electricity bills. BlueStar even announced the acquisition of another energy efficiency company, TruBrite Energy Management, last November.

"Adding the dynamic, competitive culture and expertise of BlueStar to our team will give us a strong platform on which to grow our retail energy business and hedge the output of our soon-to-be unregulated Ohio generation," Nicholas Akins, AEP president and chief executive officer, said in a statement.