Texans in competitive electric markets pay more, but that could be changing

By: Jeff Mosier |

Texans in competitive electricity markets pay more on average than their neighbors in regulated areas. But that gap has shrunk to its its smallest margin ever, according to a new report released Thursday.

From 2007 to 2016, prices in the deregulated — or competitive — areas have dropped by 19.6 percent. Prices in the regulated areas increased by 6.1 percent in that same period. The analysis, which used the most recent numbers available, was conducted by the Texas Coalition for Affordable Power, an advocacy group for local governments.

Deregulation started in Texas in 2002 and includes most of the Dallas-Fort Worth area and well as Houston. Customers in Austin, San Antonio and a few local cities — including Denton and Garland — still get their electricity from city-owned utilities.

“Average deregulated prices continue their decline — and while those prices have been consistently higher than prices in non-deregulated areas, the gap is the smallest we’ve seen,” said Jay Doegey, the coalition’s executive director, in a statement Thursday.

“This is good news for Texans purchasing power from competitive providers,” Doegey said. , the group’s executive director, in a written statement. “However, given that the price gap stubbornly persists, it’s clear that the deregulated market could still do better.”

The group’s Snapshot Report on Electricity Prices found that average residential electricity prices in Texas have increased in both the regulated and deregulated areas since 2002. But the increase was smaller in deregulated areas.

Despite those increases, the study found that Texas electricity prices were the third lowest among the 15 states with deregulated markets.

The study looked at the prices customers paid rather than the lowest available rates. In competitive areas, there are opportunities for customers to pay less. But that requires research, willingness to sort through sometimes confusing offers and willingness to switch providers often.

The study’s authors said it’s not clear whether the gap between competitive and regulated prices have closed completely, since 2017 and 2018 data isn’t yet available. However, they cited other research that found that many rates in Houston (the largest competitive city) beat the rates in San Antonio (the largest regulated city).

The Texas Coalition for Affordable Power study used data from the Texas Public Utility Commission and U.S. Energy Information Administration.

Texans in competitive electric markets pay more, but that could be changing