The myth that Texas electric customers in areas open to competition are paying more for electricity continues to take hits, as the latest data shows that rates in competitive areas are in line with rates paid at the state's municipal and cooperative utilities, and in many cases, lower than muni and cooperative rates.

 

Although intuitively the results should not be surprising, they do run counter to most of the major myths perpetuated by self-interested parties in the media, who would like to see Texans lose their ability to choose their energy provider.

 

According to data from the state's Power to Choose website for electric rates, as well as phone surveys conducted with Texas customers, the monthly bill for a customer using 1,000 kilowatt-hours per month (a typical residential customer) was about the same across all types of electric companies: competitive, cooperative, and municipal.  A chart published by the Association of Electric Companies of Texas (AECT) confirms that electric competition, or so-called deregulation, is not producing higher prices for Texans, and, in many cases, is producing lower rates than the prices paid at many co-ops and munis.

 

Let's compare rates in parts of Dallas (Oncor) and Houston (CenterPoint), where customers have a choice in their electric provider, to rates at the munis and co-ops in the state.  Starting with Oncor where Texans can choose their provider, the monthly bill for the lowest, one-year fixed-price offer costs about $100/month.  That's cheaper than the rates at 28 of the state's cooperatives, and 11 of the state's municipal utilities.  In fact, only three cooperatives have rates lower than the rates in the areas of Dallas open to competition. 

 

The story's the same in Houston, where a customer with choice can lock-in a fixed rate for a monthly bill of about $105.  That rate, which again is not a teaser or variable rate but a guaranteed fixed price, is cheaper than the rates at 23 cooperatives, where prices aren't locked-in for any period of time.  Some of the cooperatives with prices higher than rates in areas open to competition include Pedernales Electric Cooperative, Trinity Valley Electric Cooperative, and Victoria Electric Cooperative.

 

The survey results are not surprising, because no matter how electricity is sold -- through competition, cooperatives, or municipalities -- everyone has to pay the same raw material costs, meaning no one is immune from higher prices for natural gas, coal, steel, etc.  As can be seen, prices at munis and co-ops are no different than prices in deregulated parts of Texas.  However, deregulated areas do offer another advantage: choice.  While customers at munis and co-ops can't vote with their feet, customers in areas open to competition can search for an electric company with a lower rate, better customer service, or more innovative products.  That means customers with choice end up winning, because energy suppliers compete for their business.