Deregulated utility customers in Texas paying more

Fuel Fix:
The average cost of electricity for Texans in Houston and other deregulated parts of the state exceeded the national average in 2014 for the first time in three years, according to a new report released Wednesday.

The 85 percent of Texans in deregulated parts of the state also pay nearly 15 percent more than Lone Star residents in integrated utilities, such as San Antonio and Austin, although the gap has narrowed, according to the annual Texas Coalition for Affordable Power report.

The Texas Legislature deregulated the electric market for most of the state in 2002 to create competition and allow residents to pick their own providers. Consumers can compare rates online at Powertochoose.org.

“Folks living in areas of Texas with electric deregulation have paid more for electricity, on average, than Texans living without deregulation — that’s just a historical fact,” said Jay Doegey, executive director for the coalition. “But it’s also true that the deregulated market is maturing. The good news for folks living in deregulated areas is that if they shop carefully, they can find plenty of individual deals with good prices.”
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The data suggest an imperfect market for utility customers.  The stock market is usually used as an example of a more perfect market where at any given point in the day customers will pay the then market price as it fluctuates.  Utility customers are locked into a deal with their provider for a longer period of time and it is more difficult to switch providers.

It should be noted that for two years the deregulated customers did pay less than the national average because of the falling price of natural gas.

Comments

  1. "Utility customers are locked into a deal with their provider for a longer period of time and it is more difficult to switch providers."

    That doesn't sound very "deregulated" to me!

    ReplyDelete

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