In race for cheapest power, regulated rates still win, study finds
Published 10:22 am, Tuesday, July 11, 2017
Getting power in Texas is different
Residential electricity prices have fallen over the last decade for Texans who live in areas with competitive electricity markets, according to a study released Tuesday by the non-profit Texas Coalition for Affordable Power.
But there's a catch: while electricity prices have gone down in the deregulated areas of the state, those prices are still higher compared to those from regulated electric utilities.
In 2002, Texas deregulated most of its electricity market. As a result, millions of Texans pick an electricity plan from a retail electric provider, who in turn buys power from an electric company. While residents in Houston and Dallas shop for electricity plans, San Antonio and Austin are still served by traditional regulated utilities.
The disparity likely comes from the high cost of electricity transmission and the higher rates from larger power companies, according to the report. Retail electricity companies' multimillion dollar advertising campaigns could also contribute to higher costs in Texas' deregulated zone.
The coalition, which advocates for consumers, analyzed nearly a decade's worth of data, from 2006 to 2015, and found that competitive electricity rates had dropped by 17.4 percent during that period. By comparison, regulated electric rates rose by 5.5 percent.
But on average, Texans who rely on a competitive energy market for their power still paid more in 2015, just over 12 cents per kilowatt hour. Residential customers with regulated rates paid just under 11 cents per kilowatt hour.
Regulated power prices in Texas have remained at or below the national average since 2002, while deregulated prices have been consistently at or above the national average. It was only recently, in 2015, that deregulated prices dipped below the national average.