Star-Telegram Survey: Texas REPs Offer More Flexibility for Consumers to Lower Their Electric Rates

By Vernon Trollinger, October 1, 2009, News, Save Money, Special Offers

A Dallas Star-Telegram article shows that often retail electric providers (REP’s) offer lower residential rates than many municipal power companies (munis), electric cooperatives, or investor-owned utilities (IOU’s).

In the past, deregulation opponents made the argument that residential rates were higher in the ERCOT deregulated areas of Texas as opposed to communities served by munis, co-ops, and IOUs such as in the Panhandle or East Texas. However, with the sharp decline in natural gas commodity prices, the REP’s have been able to pass on considerable rate savings to their customers.
According to the Star-Telegram‘s analysis, 110 REP plans on the Texas Public Utility Commission’s website, www.PowerToChoose.org, listed an average rate of 10.64 cents/kilowatt-hour.
The Star-Telegram survey showed average September rates of 9.58 cents for five regulated IOUs; 10.43 cents for six munis; and 10.88 cents for six co-ops.
Because regulated electricity providers typically maintain long term rate contracts with their power suppliers, their rates are less volatile. When natural gas prices began sinking this past winter, regulated providers were stuck with their contracted rate and passed on the cost to their customers. While not all plans are less expensive that the regulated sector, it
does show that consumers have the power to control what they spend on
electricity by switching to a lower priced provider while those in
regulate areas are stuck with what they have.
With natural gas prices in mind, the Star-Telegram says consumers in Dallas-Forth Worth have been switching their plans to fixed rates plans of one year or longer to take advantage of the lower prices.
They also cited former State Senator David Sibley of Waco who represented the Association of Electric Companies of Texas in Austin and was a prime sponsor of the state electric deregulation law passed in 1999.  He is “enjoying a rate of less than 10 cents per kilowatt-hour.”
Sibley explains that deregulation forces retail providers to offer competitive rates and respond rapidly to consumer preferences, rather than resting assured of a profitable return as the old legacy utilities did before deregulation.
Today’s retail providers have “got to be nimble, they’ve got to be quick, and several have gone out of business because they weren’t,” he said.
Back on September 3, we once again lowered our electric rates for customers in Texas. That marked the 7th time in nine months that we’ve passed savings onto our customers by lowering rates and rolled out two new green plans for our customers.
Hey…we’re quick; we’re nimble…and we’re more than just electricity.  We’re Bounce Energy!
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  1. I would like to add that AECT has been in partnership with TexasIsHot.org in urging Texans to help change energy consumption by providing Texans with the tips, tools and information to be more energy efficient — and save money in the process. Energy conservation is without a doubt the easiest option to lower bills, help the environment and lessen our nation’s energy dependence. http://www.TexasIsHot.org.