When electric industry officials and their allies defend today’s electric prices, they typically point to variable rate offers. That’s because they know that any examination of what Texans actually pay for electricity reveals we’re paying too much. Federal data, for example, show that the average cost of electricity for residential consumers in the Lone Star State is dramatically higher than average prices in Louisiana, Oklahoma and Arkansas. Average residential prices in Texas also are higher than the average price nationwide.

But instead of acknowledging these facts head-on, the industry and its allies continue trotting out flawed analyses based upon variable rate offers.  One popular strategy is to represent the lowest variable-rate offer that can be found as a proxy for Texas electric prices generally. Another strategy is to resort to bad math: they’ll lump together a multitude of variable rate deals with more expensive fixed-rate deals, and then come up with a statewide “average” that fails to account for how much power is actually consumed and at what price.

These analyses are clearly faulty. But even more startling is that the industry continues depending upon variable-rate offers for purposes of comparison, given that the industry itself has been critical of the dependability of these offers.  Consider this TXU Energy press release from Tuesday that warns of the “trickery” and teaser rates often associated with variable rate plans.  “Consumers with variable rate plans … from other electricity providers are subject to rate changes at any time and without advance warning, in the sole discretion of their retailer,” the company states.

The Dallas Morning News, in a recent blog post by Eric Torbenson, also characterizes the deals as “pretty much worthless.” Torbenson goes so far as to argue that some appear to violate Texas Deceptive Practices Law.

But with average prices in Texas nearly 30 percent higher than average prices in Oklahoma, supporters of the status quo may feel they have little choice.  Even fixed-rate prices in Texas are of no use. Recent data from the Public Utility Commission reveal that Texans can shop around all they like for a fixed rate deal in Texas, and still not find a deal that’s better than the average rate in Louisiana.

Isn’t it time to fix deregulation?

— R.A. Dyer

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