Electric Deregulation Ten Years On

Nearly 60% of electric customers in the Houston area are taking advantage of deregulation by switching providers, according to the state's Public Utility Commission.

The state’s “Power to Choose” program — allowing consumers to choose their electricity providers — has been around for about a decade. There are more than a hundred retail providers in Texas, with several dozen making offers at any given time offering prices for residential customers. Terry Hadley is with the Public Utility Commission of Texas.

“Most areas of Texas are covered by a competitive retail electric market. That means the customer should shop for an electricity provider to find the best value.”

The Power to Choose website, operated by the Public Utility Commission, helps consumers compare.

“The website is designed to provide an accurate comparison between provider and provider. When you see cents per kilowatt hour rate on the website, that is a straight comparison from provider to provider.”

The state of Texas doesn’t require providers to participate in the Power to Choose program, so not all providers might be represented. And energy analyst Alan Lammey says the consumer is asked to make a bit of an apples and oranges comparison.

“There are a couple different providers that are quoting their residential rates in the similar fashion that a commercial rate is quoted. Commercial rates do not include the transmission and distribution fee. You may be approached by a provider out there who says they can give you a couple years at six cents per kilowatt hour, where the rest of the providers right now on a couple of years are well over nine cents a kilowatt hour, and you seem to think ‘wow, that’s a great deal!’ What they did not disclose to you was that it did not include the Centerpoint fees.”

And you have to make sure that taxes are taken into consideration as you compare. Also, the website makes comparisons based on 1,000 kilowatt hours per month, and Lammey says that means you have to keep one other thing in mind.

“It has become very much an industry standard for the retail electricity providers to charge a minimum usage fee. Typically, that is around 999 kilowatt hours per month. In other words, if you use less than around 999 kilowatt hours a month, you may see an additional fee on your bill. This additional fee can range from, anywhere from about $5, I’ve seen almost as high as $15.”

Lammey says natural gas prices are lower, and most electricity is generated by natural gas, so now might be a good time to get into a program that locks in your rate.

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