Competition is rapidly decreasing Texas electric prices, as energy providers compete for customers' business -- and it's not just the monthly variable rates which are seeing pricing declines.  Fixed-price contracts -- an innovation not available from traditional regulated utilities -- are falling as well, meaning not only can customers get a low rate for their electricity right now, but they can lock it in for 12 months, or even longer, guaranteeing them lower electricity rates for the long haul.


The cheapest electric rates in Texas remain the variable rates, which can vary month-to-month.  These rates are as low as 8.5¢ or 8.9¢ in some parts of Texas, including the Dallas-Ft. Worth area.  These prices are up to 15% lower than the old regulated rates of December 2001, right before the market opened, even when not adjusting for inflation.  Still, critics of customer choice dismiss these low rates since they may increase in the next month.


However, it's undeniable that fixed-rate energy prices are falling just as fast, giving customers not only a cheap electricity rate, but peace of mind that their rate won't go up in the next 12 months.  In fact, in just the last two months, fixed-price contracts in the populous Dallas and Houston regions have dropped over 6%, a phenomenal rate considering it's been only 60 days.  The drops by service area are below:


One-Year Fixed Contracts: May 8, 2009 versus March 9, 2009


Service                            May 8                      March 9                     

Area                                REP Offer                REP Offer                   Difference

Oncor                                9.9¢                      10.6¢                         -6.5%

CenterPoint                      10.6¢                      11.3¢                         -6.2%

TNMP                                 9.9¢                      10.1¢                         -2.0%

AEP TNC                            9.9¢                      10.0¢                         -1.0%

AEP TCC                          10.7¢                      10.9¢                         -1.8%


As seen above, fixed rate contracts are below 10¢ in three regions, including Oncor (Dallas). 


It's important to remember as well that fixed rates are something unique to the competitive market.  Under the regulated system, rates weren't fixed, and customers couldn't set their monthly budget or protect themselves against price spikes.  Monthly surcharges or riders were added to the regulated price, to cover a host of things like fuel costs, purchased power costs, and environmental upgrade and compliance costs, to name a few.  Customers could never be sure what price they would pay when using electricity.  With today's low fixed price contracts made possible through competition, not only do customers get a low price today, they're assured of keeping that low rate for the term of their contract, providing them with long-term savings and certainty.

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