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More Texans switching electricity providers to save money

More residential power consumers in Texas' deregulated market are switching retail electric providers to secure lower rates, according to a survey released Wednesday by J.D. Power and Associates.

The firm's annual customer satisfaction study shows that 41 percent of consumers in this year's survey say they have been with their current retail electric provider three years or longer. That compares with 49 percent who said that in 2009.

The survey found that "the primary reason that retail customers switch providers is to take advantage of a better deal offered by a competing retailer," J.D. Power said.

"Natural gas prices have stabilized from the volatility seen during the past few years, which has led to lower rates and greater satisfaction with price among electric retail customers," said Jeff Conklin, senior director of the energy and utility practice at J.D. Power, based in Westlake Village, Calif.

"Typical customer-reported bill amounts have declined to an average of $156 in 2010 from $170 in 2009," Conklin said.

Comparing prices

A Star-Telegram check Wednesday of the www.powertochoose.com website, operated by the Texas Public Utility Commission, showed 20 plans priced below 9 cents per kilowatt-hour, with three variable-rate plans tied for the lowest rate at 8.1 cents.

There were 114 plans priced from 9 to 9.9 cents and 53 priced from 10 to 10.9 cents. Only 35 plans were 11 cents or higher.

The cheapest one-year, fixed-rate plan was 9 cents, and three others were 9.1 cents.

Some residential customers who have never changed electric providers are finding they have been paying unnecessarily high rates and can reduce their rates significantly, in some cases, 2 to 4 cents per kilowatt-hour, by switching.

Sizable savings possible

On an annual basis, that could lower their electric bills by several hundred dollars, with the precise savings depending on consumption levels and how much they reduced their rate.

Electric rates have generally been rather steady in recent months but are far below the exceptionally high levels of mid-2008, when rates of 15-18 cents per kilowatt-hour were common as a result of natural gas prices having peaked above $13.50 per million British thermal units in July 2008.

Gas prices then began a dramatic plunge and recently have been in a range of $4-$4.50 per million Btu in futures trading on the New York Mercantile Exchange.

Natural gas prices have a major effect on electricity rates because gas is burned to generate much of the electricity produced in Texas and the volume of gas-fired generation tends to increase when demand is heavy.

A report released in August showed that the average wholesale price for electricity fell to $34.03 per megawatt -hour in 2009, a 56 percent decline from the average of $77.19 in 2008.

The report was done by Potomac Economics, the independent market monitor for the Electric Reliability Council of Texas, the operator of the power grid that serves most of the state.

The J.D. Power and Associates survey, completed in June, is based on responses from more than 7,300 residential customers of electric retailers in Texas.

Jack Z. Smith, 817-390-7724

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