Report: Electric deals getting better, but deregulation hasn’t helped most Texans
More than a decade ago, Texas lawmakers set the state’s power market free. Long-standing rules limiting who sold electricity to whom — and how much they charged for it — were cast aside so private companies could chase customers, competing for business in a free-market bonanza that would supposedly push down prices for consumers across the state.
So did it work?
Texans who take the time to sort through the options are finding decent deals in the state’s deregulated electricity market, a new report says. But the average customer in deregulated Texas — about 85 percent of the state — continues to pay far more for electricity than folks served by monopoly utilities in cities like Austin and San Antonio, according to the most recent data available.
In a report released Wednesday, the Texas Coalition for Affordable Power, which advocates for cities and other local governments, analyzed U.S. Energy Information Administration data on residential prices stretching back to 2002, the first year most Texans were allowed to choose their electricity provider under deregulation.
In 2012 and 2013, the analysis showed, Texans in deregulated areas for the first time paid lower electric bills on average than most Americans.
From 2002 to 2013, the average household in deregulated areas paid a total of about $4,800 more than residents of cities — like Austin and San Antonio — served by just one municipal utility, or those served by electric cooperatives, the analysis said.
Though pricing data for 2014 and 2015 was not available, the report said, Texans are increasingly finding individual deals on the deregulated market that are cheaper than what regulated utilities offer.
“Texans living in deregulated areas have paid too much for electricity — and the lost savings has been substantial,” Jay Doegey, the coalition’s executive director, said in a statement. “But the deregulated market is improving, and the good news is that if you shop carefully, you can find good deals. These relatively low-cost deals are more common than they were in previous years.”
John Fainter, president and CEO of the Association of Electric Companies of Texas, bristles at any suggestion that monopoly utilities offer Texans better deals, but agrees that the competitive market is rapidly evolving and consumers are getting used to it.
“There’s a lot more efficiency. People are better able to manage their electric use,” Fainter said. “The [retail electric providers] are developing more products to take advantage of.”
Governor pleads for conservation
Gov. Greg Abbott on Wednesday asked Texans to curb electricity use — for the grid’s sake.
Specifically, Abbott is asking Texans to power down electronics in the coming days between 3 p.m. and 7 p.m., the time of day when demand typically peaks.
The plea comes as Texans have cranked up their air conditioners to battle the oppressive heat, putting record-breaking demands on the state’s energy resources.
“In order to mitigate stress on our state’s electricity grid, Texans should take simple measures to save as much energy as possible,” Abbott said in a statement.
On Monday, the Electric Reliability Council of Texas (ERCOT) said it briefly handled nearly 70,000 megawatts of demand, breaking a peak-time record of nearly 69,000 megawatts set just four days earlier. — Jim Malewitz, The Texas Tribune
This story was originally published August 12, 2015 at 5:24 PM with the headline "Report: Electric deals getting better, but deregulation hasn’t helped most Texans."