On June 18th, Donna Nelson, a member of the Public Utility Commission, paid a surprise visit to the board of the Pedernales Electric Cooperative.

Donna Nelson

Her message: it’s time for the PEC to deregulate.

The PEC delivers electricity to more than 200,000 accounts in Central Texas. Its service territory covers 8,100 square miles, stretching north from San Antonio and west from Austin. But it is not open to electric competition. Nelson, who appeared before the board not in her capacity as PUC commissioner but as a longtime cooperative member and customer, said the cooperative charges too much for power.

“Given the rates we’ve been paying, why don’t we get a choice?” said the Commissioner, noting that PEC rates of more than 12.5 cents per kw/h exceeded many fixed-rate deals in deregulated areas. “Why doesn’t the board consider letting me, as a member of the cooperative, chose my electric provider? Instead I’m forced to pay rates that I think are astronomically high.”

Commissioner Nelson’s observation raises a question: have customers in deregulated areas really received better deals? To find the answer, we turned to the United States Energy Information Administration. What we found may surprise you.

Although the PEC’s current rates are nothing to write home about, the fact remains that PEC  customers have paid less for electricity than typical customers in deregulated areas for every year for which the US EIA has posted data.  The federal government reports that PEC prices beat average deregulated prices in Texas for every year from 2002 and 2009. The data for 2010 and 2011 are not yet available.

What does this tell us? Not that PEC prices are particularly great, but that deregulated prices could be better. Commissioner Nelson correctly notes that PEC customers currently pay more for electricity than what is offered by many providers in deregulated areas. But not all customers in those deregulated areas can avail themselves of the lowest-cost deals without breaking their existing contracts. Moreover, deregulated fixed-rate prices available today in Houston typically are higher than the price of electricity in San Antonio and Austin. San Antonio and Austin have municipally-owned utilities and remain outside deregulation.

Some reforms that could have helped customers in deregulated areas failed during the most recent legislative session. For instance, one bill would have established standard-offer deals to reduce confusion in the market. You can read about that bill and others at this link. And just above we’ve posted our comparison of deregulated electricity prices to those in the Pedernales Electric Cooperative. The underlying chart information is taken from the US EIA, from data tables found here.