While most of the nation's electric rates are on the rise, as the Associated Press recently noted, Texas electric rates, which are set by the forces of competition and customer choice, continue to be lower than the old "regulated" rates from 10 years ago.
The Compete Coalition recently noted that although electric rates are generally on the rise nationwide as the AP reported, rates are actually rising faster in states where customers do not have choice, and are served by a monopoly utility, versus states which have competition in the electric industry.
The final monopoly Texas electric rates for most parts of the state were in effect for 2001, as customer choice was introduced in January 2002.
The 2001 regulated rate for what is now Oncor, serving primarily Dallas and Ft. Worth, was 9.7¢/kWh (which equals 12.4¢/kWh when adjusted for inflation). Chairwoman Donna Nelson, of the Public Utility Commission of Texas, recently noted that as of the end June 2012, a customer at Oncor could find a one-year fixed electric rate for as little as 7.6¢/kWh -- a savings of 22% without adjusting for inflation, and a whopping 39% savings when taking inflation into account.
The story is the same in the other Texas service areas open to choice, which have seen competition push electric prices down 7-22% in non-inflation adjusted dollars, and 28%-39% lower when accounting for inflation.
Take, for example, the CenterPoint service area around Houston. In 2001, the monopoly's regulated electric rate was 10.4¢/kWh (or 13.3¢/kWh when accounting for inflation), while as of the end of June 2012, a customer at CenterPoint could find a one-year fixed rate for as low as 8.7¢/kWh. That's a savings of 16% when excluding the impact of inflation, and 35% when taking inflation into account.
As if these examples of savings weren't enough proof of the power of competition, Texans need only look to the high electric rates paid by their neighbors in the parts of the state still closed to competition.
For example, monopoly El Paso Electric's rate for June 2012 was about 11.6¢/kWh, Entergy Texas' rate was about 10.3¢/kWh, Austin Energy's rate was about 10¢/kWh, and CoServ's rate was over 12.9¢/kWh (not including a flat $10 charge per month). Like CoServ, many other cooperatives have electric rates in excess of the rates you can find in those parts of Texas open to customer choice.