Texas residential electric price offers have fallen by more than 28 percent since July 2008, when natural gas prices were at an all time high, according to recent reviews. Texas serves as the most recent example of how competitive electricity markets across the nation are continuing to outperform monopoly structures.

“Texas continues to raise the standard by providing real benefits to customers, illustrating how competition clearly outpaces monopoly structures in pricing, in addition to other metrics like the development of renewable energy. Because competitive markets respond faster to price signals, customers in these markets see reductions in their rates much more quickly than in monopoly markets, and Texas is a great example of how this works,” said Joel Malina, executive director of the COMPETE Coalition, an advocacy organization representing more than 280 electricity customers, suppliers, generators and other stakeholders.

Texas has developed a properly structured competitive market that benefits customers. This conclusion was determined by three recent reports, one by the Analysis Group and two by the Energy Retailer Research Consortium.  These studies reviewed the qualitative and quantitative attributes of Texas’ competitive market, and combined to find that Texas has several key attributes: low barriers to entry, many buyers and sellers resulting in many choices for consumers, transparency of prices and options and large investment in generation and transmission – including leading the nation in renewable wind generation.

Among the other merits of a competitive market is its ability to spur economic growth. According to the Texas-based Perryman Group, competition has led to the development of more than 41,000 megawatts of new electricity generation, an investment of $36.5 billion in ERCOT and another $5.8 billion spent on transmission infrastructure.

“Texas has clearly embraced competition and its energy customers are among the most supportive, demonstrating their preference for restructured markets,” Malina said.

Texans have voiced overwhelming support for competition, according to a poll released in November of 2008 indicating that nearly 80 percent of Texas energy customers favor the current competitive structure of the Texas electricity market. The poll, conducted by the Texas-based Baselice & Associates, further indicated that support for competition escalates when Texans learn that the competitive market encourages investment in power plants using diverse fuel sources.

“Right now, the nation needs the power of competition to meet our energy challenges. Transitioning back to a monopoly structure would be taking a critical step backward,” Malina said. “The economy is suffering and the relief that consumers desperately need is only found through the competitive market forces that place downward pressure on prices and increase reliability. The monopoly model has failed us before, to the tune of several billion dollars – a hefty price that we can’t afford to pay right now.”

A study by the NorthBridge Group released in December of 2008 warns against turning back the clock on electricity restructuring, highlighting the pitfalls of the monopoly response to the energy crisis of the 1970s and the resulting $200 billion mistake that befell consumers. The report also indicates that the response and the inherent flaws of the monopoly model are still being felt, decades later.

“Competition is and always has been the driver of innovation and progress,” Malina said. “Texas energy consumers, and consumers nationwide, are seeing reductions in their rates much more quickly than monopoly markets because competitive markets respond faster to price signals.