TXU

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.
 

Restructured electricity markets in Texas have encouraged competition that has led to lower electricity prices for residential consumers, according to a new study by the Texas Public Policy Foundation’s Center for Economic Freedom. The study, Prices, Reliability, and Consumer Choice in the Texas Electricity Market, shows that past reliance on U.S. Energy Information Administration (EIA) state-level data has significantly understated the reduction of competitive residential electricity prices with retail restructuring.

Using market data, the study finds that residential electricity rates in Texas have fallen well below the national average since competitive markets were established in 2001. Monopoly rates in now-competitive areas of Texas averaged 9.98 cents per kilowatt hour (kWh) in 2001, which were 15.8 percent above the national average. Today, the average competitive electricity rate of 11.01 cents per kWh is 8.71 percent below the national average, and the average of the 15 lowest offers, 9.27 cent per kWh, is 23.13 below the national average.  Adjusted for inflation, the average competitive price is 9.46 percent below the average 2001 monopoly rate, the average of the 15 lowest prices is 24.39 percent lower, and the lowest average price is 30.5 percent lower – staggering evidence that competition has driven electricity prices lower for consumers.