Despite several upward pressures on energy prices, Texas residential electric rates remain near historic lows, and competition is holding back rate increases as competing providers seek to lure customers away from their competitors.

However, customers must actively shop for these low electric rates to enjoy the savings available, and data from the federal government shows that many Texans are still paying too much for electricity -- presumably because they don't shop around for the best deal.

Specifically, the U.S. Electricity Information Administration (part of the Department of Energy) reported that the average residential electric rate paid by Texas customers in September 2013 (the most recent month for which data is available) was 11.33 cents per kWh.

Now part of why the Texas average rate listed by the EIA is so high is because the EIA data includes parts of Texas not open to competition, including munis and co-ops, where, as® has previously noted, electric rates are higher because there is no competition to discipline prices. But given that about three-fourths of Texans can choose their electricity provider, these high rates from non-choice areas cannot explain away the entire difference.

The reason the EIA average Texas electric rate is so high is because many Texans have not shopped for electricity, or because customers shop infrequently and are no longer getting the best deal. These customers may, in fact, be paying rates of 11 cents or 12 cents per kWh, even though they can pay 40% less for the same electrons just by switching providers.

Indeed, it is estimated that as many as 1 in 6 Texans have NEVER shopped for a lower electric rate, and are still with the "legacy" provider who took over from the utility when competition was opened in 2001.

Because these customers are so "sticky," the legacy provider knows it can raise rates above what competitive shoppers are paying, because the "sticky" customer is not actively comparing rates. Indeed, these legacy providers offer much lower rates to other customers who actively shop the legacy provider against competitors.

Another reason many Texans pay too much for electricity, pushing the statewide average rate up, is that when their low-price contract expires, they do not actively shop for a new low rate. Customers may forget their contract is expiring, or think they are too busy too find a new rate. When this happens, their electric provider puts them on a no-contract "rollover" product, and these products typically cost more than the low rates available for customers who actively shop around. Customers in many cases don't even realize that they've been put on a higher rate under a rollover product.

What this all means is that Texans must proactively check their energy rate to make sure they are getting the best deal. If they are paying too much, finding a low electric rate is quick and easy, and takes just a few minutes.

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