As oil prices continue to fall and recede below $50/barrel, so are Texas electric prices, and customers still have a great opportunity to shop for a long-term, lower rate. And the ability of Texas electric customers to choose their energy provider is keeping rates lower than what they would be under old-style monopoly regulation, new studies from separate groups confirmed last week -- even when comparing higher prices seen this summer.
First, The Analysis Group compared the current electricity prices that Texans are paying with what rates would have been if customers could only buy their power from the old TXU or Houston Light and Power. The analysis confirmed that electric competition is saving Texans real money.
If customer choice had not been implemented, prices since 2001 in the Dallas and Houston areas would have doubled, and would exceed 20¢/kWh, The Analysis Group determined. Based on adjustments for today's higher fuel and labor costs, regulated rates for residential customers today would be 20.28¢/kWh at TXU and 21.67¢ at Houston Light and Power.
That's significantly higher than the low prices available today, and anywhere from 6¢ to 8¢ more than the prevailing rates under competition, which average in the 12-13¢ range. Moreover, under the old monopoly system, customers would be paying higher rates with no alternative to choose from. With competition, not only do Texans get lower prices, they can shop around for electric companies offering renewable energy, rewards and loyalty points, and higher levels of customer service.
A second study by the Northbridge Group confirmed that Texas electric rates are not raising any faster than similarly situated states that depend heavily on natural gas to fuel their power plants. The study found that rates in regulated and deregulated states tracked each other very closely from 1997-2007, and that deregulation is not responsible for higher prices in Texas.
Texans still need to take action to enjoy the benefits of competition and lower prices, however. Many Texans still have not switched their energy provider, and remain with their old "legacy" electric company from the monopoly era. In doing so, customers are paying more than they need to for electricity.