Why are electric rates so much higher than rates in neighboring states? That’s the question tackled by reporter Jack Z. Smith in an article that ran recently in the Fort Worth Star-Telegram.
Speaking to Smith, several experts blamed deregulation. “If you look around the country, to where states have gone to unregulated electricity markets, they are paying higher prices,” said Andrew Tevington, deputy director of the Public Utility Division of the Oklahoma Corporation Commission. The article noted that Texans paid residential rates below the national average before deregulation, but now pay rates above the national average.
Some experts quoted by Smith blamed high prices in Texas, at least in part, to the relatively high reliance here on natural gas to fuel electric generation plants. But Smith notes that regulated Oklahoma relies even more heavily on natural gas — and yet residential rates there remain much lower than those in deregulated Texas.
One electric industry representative quoted by Smith defended the deregulated system, noting that consumers in Texas unhappy with their electric rates can shop around for better deals. But the article cites a number of reasons why many consumers don”t shop for better deals — including the assessment of early termination fees that discourages switching from fixed-rated deals and the confusion felt by some elderly consumers about using computers to shop for electricity.
One point not noted by Smith, however, is that even Texans who overcome such obstacles and shop around for the BEST electric deals available can still expect to pay more than consumers in regulated Louisiana, Arkansas and Oklahoma. That is, even the lowest-priced competitive deal in Texas fails to match AVERAGE rates in those adjoining states, according to a comparison of competitive rates on file at the Texas Public Utility Commission with corresponding pricing data from the federal government.
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.