Newly released data from the federal government confirms what has become a troubling trend for millions of Texas electricity customers. If you were served by a competitive electric provider in 2011, chances are you were getting a worse deal than residents in Austin, San Antonio and other communities exempt from the Texas electric deregulation law.
That is, according to newly released data from the United States Energy Information Administration, Texans living in areas with retail electric competition paid significantly more for power in 2011, on average, than Texans living elsewhere.
Under the law, electric companies in most of Texas — but not all of it — have gained an ability to compete for retail customers. But average residential electricity prices in areas of the state with deregulation have remained stubbornly higher than prices outside deregulation. The federal government data show this trend began in 2002, which was the very first year of retail electric competition, and has continued unabated through 2011. It’s a good bet that it’s also true for 2012, although the federal government has not yet released the relevant data to conduct that analysis.
The price differences also can be quite sizable. In 2011, for instance, the average price of residential power in deregulated Texas was more than 43 percent higher than the average price in areas exempt from deregulation. Residential electricity prices in deregulated areas also jumped by 41.9 percent between 2002 and 2011, while they increased by only 8.25 percent in areas without it.
It’s important to keep these pricing details in mind when you hear about proposals to make electricity in Texas even more expensive. Lobbyists for several big power companies are pushing hard for what is known as a “capacity market,” which would add an additional layer of costs onto the price of power. This is a bad idea.
You can read more about capacity markets here. Also, the Texas Coalition for Affordable Power has recently released a report with even more details about power prices. You can find the report online, at this link.
ABOUT the Texas Coalition for Affordable Power
TCAP is a coalition of more than 165 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.
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.