Residential electricity prices in areas of Texas with deregulated electricity service have dipped below the national average for the first time in a decade, according to a new report from the Texas Coalition for Affordable Power.
The lower prices in 2012 represent the fourth consecutive year of declining prices for Texans under electric deregulation. The improving prices parallel a recent decline in electricity-related complaints in Texas.
However, the news is not all good for Texans under deregulation. The new TCAP analysis also shows that Texans in deregulated areas have continued paying significantly more, on average, than Texans outside deregulation. Texans in deregulated areas would have saved more than $22 billion collectively since 2002 had average residential electric prices under deregulation matched average prices outside deregulation, the report shows.
“This is another good news-bad news story for electricity consumers in Texas,” said Dr. Randy Moravec, executive director for the Texas Coalition for Affordable Power. “Residential electricity prices under deregulation continue trending in the right direction. But those prices are still higher than what power customers pay in areas of Texas not subject to deregulation. This analysis shows there’s still plenty of room for improvement under our deregulation law.”
Under electric deregulation, retail electric providers in approximately 85 percent of the state can compete for customers. The analysis examines residential pricing data in those areas, and compares it with pricing data in areas of Texas outside deregulation (such as areas served by municipally-owned utilities and electric cooperatives). The analysis includes data for all years from 2002 — the first year of deregulation — through 2012. The report does not cover 2013 because the data needed for the pricing analysis is not yet available for that year.
The report shows that average residential electricity prices in deregulated areas of Texas have been as much as 46 percent higher than those in areas of Texas outside deregulation. Had Texans under deregulation paid the same average prices as Texans exempt from deregulation, Texans under deregulation collectively would have saved $1.5 billion in 2012, according to the report.
A typical customer paying average electricity prices charged by deregulated retail electric providers would have saved more than $280 in 2012 if that customer instead had paid the average electricity prices paid by Texans in areas outside deregulation. Over the course of deregulation, the computed savings for such a customer would have exceeded $4,500, according to the report.
ABOUT the Texas Coalition for Affordable Power
Unlike the sponsors of other reports about the state’s deregulated power market, TCAP derives no profit from selling electricity. Instead, the 168 cities and other political subdivisions that comprise TCAP purchase electricity for their own governmental needs. TCAP wants what all Texans want: an affordable and reliable supply of power and a vibrant economy.
Is a policy analyst for TCAP, a coalition of 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.