Consumer advocates and state regulators agree that competition in the energy industry is lowering electric rates for customers.
Wholesale energy prices in the PJM region, which covers Pennsylvania to Maryland to Illinois, are 40% lower than they were at the start of the year. Customers, however, can only take advantage of these lower rates if they choose a new energy provider, since the utilities are still charging rates based on last year's record high prices.
In Texas, the Public Utility Commission noted that rates in competitive areas of the state, like Dallas and Houston, continue to fall.
Barry Smitherman, Chairman of the Commission, noted that "Competition has pushed down prices below those found in noncompetitive jurisdictions."
As noted by the Wall Street Journal, "The economic downturn, combined with a boom in natural-gas output, has driven wholesale energy prices sharply lower in the past year, inspiring an increasing number of recession-strapped households to shop around for cheaper rates."
"All of a sudden, we're in a situation where we have competition working," agreed Ohio Consumers' Counsel Janine Migden-Ostrander, who represents residential ratepayers on utility matters.
As the Journal noted, when customers are able to choose their electric company, customers can benefit from lower electricity rates. Currently, the rates offered by many monopoly utilities are higher than the price in the wholesale market and the rates offered by competing electric companies. That's because some utilities in states across the Northeast and Mid-Atlantic like Pennsylvania, Maryland, Illinois, and Connecticut buy power in advance, and blend their supplies over two to three years.
That means a good portion of current utility rates are based on last year's record high energy prices. Customers can avoid these higher prices by switching to a new energy supplier, who buys electricity at current, low rates.
But customers need to take advantage of their ability to choose a new energy provider to realize these savings. The easiest way to find a low electric rate in Texas, Pennsylvania, or any other of the more than a dozen states offering customers the ability to save money on their electric bill is to compare offers from multiple providers.