Shopping for electricity in the Texas deregulated market can be a bewildering experience. A consumer may think they’ve selected the lowest-cost deal, only to find that it includes an onerous deposit requirement or some other restriction.
To make the market more transparent, many Texans are supporting the establishment of standard offer or “Rate is True Price” deals that would allow them to choose their electricity providers based solely on price, not confusing differences in the fine print. Standardized deals also would enhance competition because they bring additional choices to the market place. The Texas Legislature could consider ordering standard offer deals when it convenes in 2011.
This is how standard offer deals would work:
As a condition of doing business in Texas, retail electric providers would be required to offer among their regular selection of products a standardized fixed-rate deal with terms and conditions set by the Public Utility Commission. Electric retailers would be free to set the price of these standardized deals in any way they see fit. They’d also continue to enjoy the full freedom to set terms, conditions and prices for all the other non-standardized electricity products they offer.
Because the terms and conditions would be identical across the market for standard offers — regardless of the retail electric provider that sells them – these deals would provide a way for Texans to make apples-to-apples price comparisions when shopping for electricity. Texans also would have the option to select any of the other non-standardized deals that would continue to be offered by electric companies. Standard offer deals would remain valid for fixed terms, presumably for one year.
You can learn more about the issue by checking out the video, above. A proposal for standard offer deals is also included in legislative proposals supported by the Cities Aggregation Power Project. Many consumer groups, mayors, city council representatives and private citizens also have expressed support for standard offer deals.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.