Electric companies in Texas blame their higher prices on the rising cost of doing business. TXU, for example, says it is charging more because it is paying more for natural gas to run its plants.

Since deregulation began, the price of natural gas has more than doubled, from $3.11 per thousand cubic feet to $6.52 per thousand cubic feet. That's according to TXU filings to support five billing increases in the past two years.

Texas lawmakers deregulated the electricity industry in an attempt to bring in more competition and lower prices. The Public Utility Commission historically has acted upon requests for rate increases; it still does for many companies, but its role is limited.

Consumer advocates say the PUC has made it too easy for power companies to raise rates, and no mechanism exists to lower rates when prices drop.

Tim Morstad, a policy analyst with Consumers Union, said the rules that govern deregulation mean the PUC merely "rubber-stamps" rate increases that are based on increased natural gas prices.

"But if natural gas prices fall, there is no way rates can be lowered," Morstad said. "The PUC's hands are tied and so are the Legislature's. TXU comes in five times and gets five increases. We call that a one-way-street problem."

The PUC is limited, said Morstad, because only the power companies now can initiate changes in their rates.

Julie Parsley, a PUC commissioner, urged consumers to shop for a better deal if they don't like what TXU charges.

"In the Waco area, there are 12 different providers offering 16 different types of products," said Parsley, speaking by telephone from Austin. "People can shop for companies based on fuel mix and billing plans. One provider promises up to 20 percent off the TXU rate."

Parsley defended the PUC's approach to granting increases based on changes in natural gas prices.

At this point in deregulation, she said, "the only portion of its rate that TXU can change is the fuel factor, that portion attributable to fuel costs. We have passed rules to make acting on these requests a streamlined process that allows them to recover these costs fairly quickly. We did not want to (financially) harm someone by making them go through a full-blown rate case."

But some consumer groups remain unconvinced that the rules are serving Texans well. Among the doubters is Suzi McClellan, public counsel for the Office of Public Utility Counsel, an independent state agency that represents residential and small commercial consumers in electric issues.

She said that if natural gas prices go up, companies like TXU can raise the fuel-factor component of their rates by a like amount, "even if the utility uses very little natural gas. They may use coal, natural gas or nuclear power."

For example, McClellan said natural gas represents less than half, or 48 percent, of TXU's fuel mix.

TXU spokesman Carlos Santos said the PUC uses natural gas prices in its index "because market electricity prices are highly correlated with natural gas prices in Texas, regardless of the field used to generate power."

But the fact remains, say regulatory sources, that TXU and other larger companies can pursue rate increases based on rising natural gas prices, even if they don't pay those rising prices. They need only show that prices have gone up.

Each company may take its case to the PUC two times each year.

"A company may be getting (natural gas) cheaper, or it may be paying more," said PUC spokesman Terry Hadley. "Though I would expect that if a company is a savvy buyer, the price it is paying is probably lower."

Santos said TXU customers are paying higher bills because of higher natural gas prices, but he defends deregulation. He said the state ordered TXU and other incumbent power companies to lower their base rate 6 percent when deregulation began.

That lowered base rate remains in effect, said Santos, adding: "Consumers are still paying bills that are 6 percent lower than they would have been had deregulation not been in effect, had we not been in a deregulated market."

The PUC allowed electric companies to recoup natural gas costs even when the industry was regulated in Texas.

When it launched deregulation, the state sought to set what it called price-to-beat rates. It ordered the big power companies like TXU, Reliant Energy in Houston and WTU Retail Energy in Abilene to lower their base rate by 6 percent -- but only by 6 percent.

The state wanted to create competition, but it did not want to leave incumbent power companies overly vulnerable to newcomers, said Ray Perryman, a Waco-based economic consultant. It gave the big companies a rate cut so they would remain attractive to customers, but it would not allow the companies to drastically lower rates, a move that would have discouraged competitors.

Companies that were asked to set price-to-beat rates must go before the PUC to get fuel-related rate increases. New competitors to the market can charge whatever they want for electricity and need not ask the PUC for permission to raise or lower rates.

The price-to-beat concept "goes away" on Jan. 1, 2005, says Hadley.

Beginning then, the big companies like TXU can lower their base rate if they so choose, he said. But they can't raise base rates until two years later.

"Things become completely unregulated on Jan. 1, 2007," said Hadley, who urged customers to check out the competition.

"Without a sufficient number of folks shopping for electricity," he said, "the incumbent companies will have no incentive to keep their rates down."

Hadley said 15 percent of TXU's residential customers, or about 350,000 people, have switched to other companies. He added: "I bet there is a good chunk of people who haven't even considered it yet."

Morstad, with Consumers Union, said TXU "still completely dominates its market, with 83 to 84 percent of the residential customers still with them. For whatever reason, they're just not switching."

Some industry sources say that consumers are sticking with TXU and other incumbents because they feel secure with them.

In a letter to PUC commissioners, Brian Lloyd, director of retail market oversight for the PUC, wrote: "Staff has become aware that many market participants believe that concerns about reliability remain a significant impediment to customers entertaining the idea of switching providers."

The letter adds: "As of March 2004, residential switching rates range between 14 and 21 percent, depending on the service area. We have typically seen increased switching rates during the summer months when customers are most attuned to their electric bill."

Some customers hire an aggregator to sort out their energy options.

Locally, T.J. Ermoian has started a company called Texas Energy Aggregation, which helps commercial customers find the best deal on electricity.

"The big boys win when the customer is confused," said Ermoian, who receives 10 to 15 percent of a customer's savings on electricity as his fee. "Competition only works if a customer takes advantage of better rates or better customer service."

Ermoian switched the Stilwell Retirement Residence, 5400 Laurel Lake Drive, from TXU to Constellation NewEnergy.

"He took information about our particular facility, our needs, approached several different companies that did commercial electricity, and came up with a comparison of rates. He served as the middleman," said Joel Wright, Stilwell's executive director.

Wright estimated he's saving 15 to 20 percent "from what I would have been paying with TXU."

Ralph Lee, owner of The Craft Gallery, 7524 Bosque Blvd., said he believes he's saving money by switching electric companies at his business. But he can empathize with those who haven't switched their home providers.

"To be honest, I just haven't gotten around to doing it at home," he said. "I know it's true. People are not shopping."