Houston pays more for power than Austin

Consumers in deregulated markets still outspend counterparts, study says

CONSUMERS in Houston, Dallas, Fort Worth and Corpus Christi were promised bargains on electricity when the Texas Legislature deregulated the electricity market. But 16 years later, they’re still paying more for electricity than their counterparts in cities Texas lawmakers exempted from deregulation such as Austin and San Antonio, according to the Texas Coalition for Affordable Power, which analyzed federal electricity pricing data.

That means that customers in Houston paid an average of $5,500 more for electricity over a 14-year time span beginning in 2002, according to the group that buys electricity on behalf of municipal governments in Texas. The calculation, which uses data from the U.S. Energy Information Administration, assumes monthly electricity use of 1,300 kilowatt hours.

Texas deregulated most of the state’s electricity markets in 2002, a move aimed at lowering electricity costs by letting consumers choose their own electric power providers and their own plans. Some parts of Texas continued to be regulated, including those that get power from municipal utilities, electric cooperatives and investor-owned utilities that operate outside the state’s primary power grid.

But competition didn’t necessarily end up cutting prices, according to the re-

port. One contributing factor is confusion among customers as they try to choose among scores of retail electricity providers and the overwhelming variation of plans, leading many to just stick with familiar companies rather than look for better deals, according to the Texas Coalition for Affordable Power.

Another is the multimilliondollar marketing campaigns launched by retail electric companies to attract customers. Those costs are built into rates. Also adding to bills are the increasingly higher rates charged by regulated transmission and distribution utilities such as CenterPoint in the Houston area.

Customers can find deals in competitive electricity markets if they take the time and effort to look at web sites such as powertochoose.org, the official comparison shopping site of the Public Utility Commission. The study cited a PUC survey of retail electricity offerings in Houston that showed nine deals in March that were lower than the regulated price of electricity in San Antonio.

Even though customers in deregulated Texas markets routinely pay more for electricity, there is a bright spot. The gap between the average price paid for electricity between deregulated and regulated market has shrunk to 8.8 percent. In 2006, customers in deregulated cities were paying nearly 47 percent more for electricity than their counterparts in regulated cities.

LM Otero / Associated Press file A new study has found consumers in deregulated electricity markets are still paying more than those in cities that lawmakers exempted from deregulation 16 years ago.