Competitive Markets a “Big Time” Win for Texas

New power generation, innovation, greater use of renewable energy, and competitive pricing are the hallmarks of competitive electricity markets in Texas, Mitchell Schnurman, a business columnist for the Fort Worth Star-Telegram, highlighted in a recent column.

Texas consumers are “winning big time,” Schnurman notes with some competitive regions seeing electricity prices that are 25 percent less than the national average.  Since Texas Electric Choice was introduced in 2002, more than 85 percent of Texans in competitive areas have chosen their retail electric providers. Unlike a monopoly model – where customers are captive to incumbent providers’ pricing – residential and business customers in a competitive market can shop for the most competitive rates.  As suppliers compete against one another, customers receive the best possible service at the lowest cost.

Schnurman also trumpets the expanded role of renewable energy in Texas.  Competitive markets spur the integration of renewables, allowing Texas to “remain a global leader in developing wind power.”  Retailers also bring innovative technologies and strategies such as time-of-day pricing and other products enabled by smart meters that help customers manage their usage and costs and keep the grid running smoothly.

In Texas, power providers are constantly working to efficiently generate and transmit electricity. In competitive markets, when there is a surge in demand requiring new generation infrastructure, the financial risks are born by investors, not the ratepayers.  This has helped keep Texas reliability “strong.” Meanwhile, ratepayers living under state-appointed monopolies shoulder the cost of building new plants and may never benefit from new or improved resources.

“I always believed that [electric competition] was about more than just rates,” writes Schnurman.  With residents and companies shopping for better rates along with electricity plans that utilize innovative and renewable technology and cleaner and more efficient generation, Texas is seeing that promise realized.
 

Joel Malina | March 28, 2011