Texans living in deregulated electricity areas paid about $22 billion more in the last decade than they would have under a regulated system, according a recent analysis by a consumer group.
Texas residential consumers have paid as much as 45 percent more for deregulated electricity than their counterparts in regulated areas of the state since lawmakers devised the new system for much of the state in 1999, according to the Texas Coalition for Affordable Power, which recently published an assessment of Texas energy price data from 2002 through 2012.
The findings raise questions about claims made at the time that deregulation would result in lower prices for Texan consumers. While prices for both deregulated and regulated electricity have fallen since their peak in 2008, average deregulated prices remain about 3 cents high per kilowatt hour than their regulated counterparts for residential consumers.
“Residential electricity prices under deregulation continue trending in the right direction,” said Randy Moravec, executive director for the Texas Coalition for Affordable Power. “But those prices are still higher than what power customers pay in areas of Texas not subject to deregulation. This analysis shows there’s still plenty of room for improvement under our deregulation law.”
The consumer group urges Texas regulators to make consumer education a priority and to require standardized electricity products, both of which could help customers better understand how to lower their bills by taking advantage of more competitive offers. Many Texans have said they find the current system confusing, although recent studies have indicated that the comfort level with deregulation is increasing.
Prices for deregulated electricity in Texas have also stayed higher than national electricity prices for most of this time, dipping below the national average in 2012 for the first time since deregulation started. In 2012, Texans in deregulated areas paid 11.75 cents per kilowatt hour while the the national average was 11.82 cents. Prior to deregulation, Texans had consistently paid lower electricity rates than the national average throughout the 1990s, the report said.