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Fri, Nov

Texas Coalition for Affordable Power: Despite Persistent Price Gap, Competitive Electricity Market Makes Gains in Texas

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AUSTIN, Texas--(BUSINESS WIRE)--Average residential electricity prices in areas of Texas with retail electric competition declined during a recent 10-year period, while average prices in deregulation-exempt areas increased.

And although residential electric prices in areas with retail electric competition have remained consistently higher, on average, than prices in deregulation-exempt areas — the annual percentage price gap between these two areas has dwindled to the narrowest point ever.

These findings and more are included in a new Snapshot Report on Electricity Prices by the Texas Coalition for Affordable Power (TCAP). Taken together, the developments suggest the 16-year-old deregulated retail electricity market is delivering some of its best results so far for Texas residential consumers.

However, the news is not all good for Texans living in areas with retail electric competition. Year after year, average residential prices in deregulated areas of Texas have remained higher than those in areas exempt from deregulation.

TCAP has posted its new analysis on the coalition’s website, tcaptx.com, at this link.

“We have been conducting this report for years, and this is the most encouraging one yet for Texans living in areas with retail electric deregulation,” said Jay Doegey, TCAP’s executive director. “Average deregulated prices continue their decline — and while those prices have been consistently higher than prices in non-deregulated areas, the gap is the smallest we’ve seen. This is good news for Texans purchasing power from competitive providers.

“However, given that the price gap has stubbornly persisted, it’s clear that the deregulated market could do better,” he added.

Under the state’s retail electric deregulation law, consumers living in about 85 percent of Texas can shop for electricity in much the same way they can shop for cell phone service. Residents in the remaining 15 percent of Texas do not have options for service, and instead must purchase electricity from a single deregulation-exempt provider in their area.

This bifurcated system — with some Texans receiving service in deregulated areas, and others receiving service in areas exempt from deregulation — provides a unique opportunity to compare prices.

The new TCAP Snapshot Report also reveals that rates charged by the state’s two largest transmission and distribution providers have increased beyond the level of inflation, and that these transmission and distribution rates comprise a larger proportion of home residential bills than they did previously.

You can find the new Snapshot Report on Electricity Prices and other TCAP reports at TCAPTX.com.

ABOUT TCAP

TCAP is a coalition of more than 160 cities and other political subdivisions that procure electricity in the deregulated market for their own governmental use. Because high prices can undermine municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. Sign up for TCAP’s free online newsletter at this link.