Residents in Houston and Dallas can choose among a growing number of competitive electricity deals with prices that meet or beat prices in deregulation-exempt areas of the state, according to a new report from the Texas Coalition for Affordable Power.
What remains unclear, however, is whether the surge of low-cost individual deals in competitive areas of Texas signals a reversal of a long-term trend of higher average prices there.
From 2002 through 2014 the imputed “lost savings” from higher average electric prices in areas with retail electric competition exceeds $24 billion.
These good news-bad news findings are included in a new Snapshot Report on Electricity Prices released today by TCAP. The online analysis can be found on the TCAP website, found at http://tcaptx.com/report/new-snapshot-report-electricity-prices-in-texas
“Folks living in areas of Texas with electric deregulation have paid more for electricity, on average, than Texans living without deregulation — that’s just a historical fact,” said Jay Doegey, executive director for the Texas Coalition for Affordable Power. “But it’s also true that the deregulated market is maturing. The good news for folks living in deregulated areas is that if they shop carefully, they can find plenty of individual deals with good prices.”
Under the state’s retail electric deregulation law, consumers living in about 85 percent of Texas can shop for electricity in much the same way they can shop for cell phone service. But residents in the remaining 15 percent of Texas don’t have similar options for service, and instead must receive electricity from a single deregulation-exempt provider in their area.
This bifurcated system — with some Texans receiving service in deregulated areas, and others receiving service in areas exempt from deregulation — provides a unique opportunity to compare prices. The new TCAP analysis reveals that average residential electricity prices in deregulated areas remained higher than average prices outside deregulation for every year from 2002 through 2014.
It remains unclear how those average prices compare in 2015 and 2016 because the necessary data for those years has not yet been released by the federal government. However, TCAP has identified scores of individual competitive deals during 2015 and 2016 that meet or beat prices common in deregulation-exempt areas without competition.
The new TCAP Snapshot Report also reveals that rates charged by the state’s two largest transmission and distribution providers have increased in recent years beyond the level of inflation, and that these transmission and distribution rates comprise a larger proportion of home residential bills than they did in previous years.
Transmission and distribution charges are “non-bypassable,” which means that all electric customers in a given region must pay them, regardless of the retail electric provider the consumer has selected for service.
TCAP is a coalition of more than 170 cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.