Texas Tribune: Electric Competition Works in Texas

Competition in Texas has created economic and environmental benefits for consumers, the Texas Tribune reports in an article examining the results of the state’s competitive retail market. The COMPETE Coalition applauds the Tribune for correctly identifying many successes of Texas’ competitive electricity market.
 
COMPETE closely follows electricity developments across the country and agrees with many observers that the Texas market is without question one of restructuring’s biggest success stories, providing consumers a robust choice of competitive power suppliers. “From 2002 to mid-2009, 86 percent of customers made at least one observable switch, whether between providers or to a different plan offered by the same provider,” the Texas Tribune reported.
 
Similarly, a recent Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) report ranked Texas highest in customer choice attributes and cited numerous product offerings and services unavailable in non-competitive electricity markets. Scores of alternative power suppliers participate in the state’s market, and prices have remained highly competitive.
 
Clean energy is also thriving in Texas – a result of the unique advantages competitive electricity markets offer to low-carbon energy sources. The state is ranked number one in the country in installed wind capacity, as the Tribune points out: 

"Deregulation was great for wind," says Andy Bowman, the founder and president of Pioneer Green Energy, a renewable energy development company. That's because the system encouraged greater use of natural gas immediately after deregulation; then, when gas prices soared several years ago, wind power became competitive. Texas' first "renewable portfolio standard" — or requirement that the state's utilities get a certain amount of their power from renewable energy like wind — was signed into law in 1999, as part of the same legislation that deregulated the electric market. 

Competition also enables smart grid technology that fosters greater ability for providers to communicate with customers and new tools to help customers manage their energy demands: 

Lisa Singleton, a spokeswoman for Energy Future Holdings, whose companies include TXU Energy, argues that deregulation has also encouraged the development of smart-grid technologies. Without it, "I don't think we would have seen the same investment or deployment of smart-grid technologies." 

Even though competition is working very well in the Lone Star state and customer choice rates are high, continued customer education and participation in the market remain a key goal for stakeholders – including state regulators, who maintain the “Power to Choose” website. This highly educational tool helps customers make informed decisions in the marketplace.
 
COMPETE applauds Texas policymakers for building a strong competitive electricity system that has enabled Texans to enjoy the benefits of market forces.
 

Joel Malina | July 15, 2010