Recent Profile of Retail Texas Electric Rates

cheap electricity from wind energyAccording to the Texas Coalition for Affordable Power (TCAP) and their annual snapshot of electricity prices in Texas, prices have decreased in the deregulated areas of Texas. These price decreases were not easily apparent at first though because of price spikes during the first year the retail electricity market was deregulated (2002). But, as consistent trends and data have shown, and as TCAP has reported in the past, prices are continuing to fall for consumers.

The formula for customers of deregulated (competitive) electricity markets versus regulated (non-competitive) markets is that those who were in the deregulated region have always paid higher than average. But now, as TCAP has shown in their snapshot, the gap between regulated and deregulated prices is quickly closing

And in fact, TCAP also states in their annual snapshot Texas has one of the cheapest electricity average price increases in the 15 states that were deregulated. In addition, recent price increases between regulated and deregulated parts of Texas has seen higher increases in the regulated sector, meaning that soon deregulated prices could fall far below the regulated sections.

Deregulation and Markets

But all of this data is just the average data compiled between all providers. If you look at various retail electric providers in deregulated Texas you can find a lot of rates that are cheaper by the kilowatt hour than non-competitive markets. Many offer green plans and free nights during low demand hours that offer flexibility and more savings than the rigid plans you see from competition-exempt utilities.

With the average price in mind, remember that competition drives prices in the market. So, if Retail Electric Provider A in deregulated Texas gives customers superior service and lower prices, Retail Electric Provider B and C will have to follow suit or see customers flock to their competitors. This means fluctuations in price, but also, fluctuations that have a far greater potential to hit lower than average prices when compared to non-competitive providers.

Texas in general has some of the cheapest electricity in the country. A lot of this is because of the high number of renewables and wind-generated electricity. So, for those who are deregulated portions of Texas, you are getting some of the cheapest electricity, and it’s only getting cheaper!

The Benefits of More Wind Farms

Wind has been an incredibly robust source of renewable energy for electricity generation in Texas. And as wind farm development is at a record high in the Nation, there is a lot to be optimistic about in the Texas energy sector and for advancements in renewable energy in general.

According to data laid out by the American Wind Energy Association, there are over 200 wind farm projects that are in the process of being built or are close to being added to the ever-growing collection of wind farms out there. Additionally, “The U.S. wind industry installed 736 MW of new wind power capacity in the second quarter of 2019. The industry has commissioned 1,577 MW in the first half of the year, a 53% increase over the first half of 2018.” 

Wind Leads to Cheaper Electricity

Texas is ahead of the pack with over 25% of all wind power capacity in the country.  But really, the country is strongly developing as well, putting forth a lot of resources and capital into greener, cleaner energy.  

A big incentive for this push for wind farm production is that the Government awards production tax credits (PTCs) for their development. As the EIA states though, those credits are being phased out this year, so that’s a large reason for an uptick in recent wind farm development.

And yes, wind generation lowers the prices of electricity rates for consumers. The government subsidies really do result in cheap electricity rates for consumers. In addition, some electricity plans can even provide free electricity at night as a result of this readily available, renewable source. 

The Future of Wind Production and Technology

As the American Wind Energy Association states, the 2Q of 2019 is looking to be a groundbreaking year for wind development. With the “total U.S. wind capacity to 97,960 MW, with more than 57,000 wind turbines operating in 41 states and two U.S. territories,” the future looks bright for renewable energy efforts in the country. 

Even after considering the tax credit phaseout, there are still many green initiatives driving the production as we look to keep our environment clean by combating climate change.

And not to mention recent advancements in turbine technology, which are driving up the efficiency of the windmills. According to Scientific American, turbines are about a MW more powerful than the majority of those in operation today, so a lot of newer turbines are producing more energy. This also means that larger, more efficient towers are being built to free up space.

All of this is an exciting glimpse into the future of wind-generated energy!

Wind-Generated Electricity Continues to Win Out Over Coal

There has been a consistent upward trend for wind-generated electricity in Texas. As the Electric Reliability Council of Texas has recently reported, the industry is continuing to invest in renewable energy for the long haul.

ERCOT states that wind-generated electricity in Texas has beaten coal by 1% so far this year. That means that wind was responsible for 22% of all of the electricity generated in the state. Coal represented 21%.

Of course though, natural gas is still ahead of the pack at 38%. And it accounted for 44% last year, so it’s safe to assume that it will be the leader for years to come while renewable sources like solar and wind continue to rise.

Now, a lot of analysts have chimed in, sensing that wind’s current placement in the rankings is because of uncharacteristic weather. And that could certainly be the case come the latter half of this year. But the data has been consistent across recent years that renewable energy sources like wind in particular are to be viable and robust agents of change in the Texas electricity economy.

As ERCOT pointed out in 2016, wind topped 15,000 MW. That record-setting mark is just a glimpse at how the electricity dynamic is shifting, and will continue to shift as it has since the start of the millennium when wind sources hadn’t represented even 1% of Texas power.

Some Reasons for Wind’s Recent Rise to Power

As Smart Energy International points out, Texas has the most potential for wind generation in the entire United States. A large part of this is the consistent and often chaotic winds that buffet the Texas locale.

As this article states on the wind power of Texas, the state has more than 12,000 wind turbines. This means that “the state’s $40 billion private industry also employs a quarter of the nation’s wind-energy employees.”

Because of these considerable investments in wind energy, it’s no surprise that wind energy has climbed so steadily over the years to just now surpass coal in the first half of this year.

Forecasts for Renewable Energy

CNN states that Texas produced a quarter of the nation’s wind energy in 2017. And as the U.S. Energy Information Administration (EIA) continues to forecast, they think that solar and wind will continue to grow the fastest in the next two years compared to other sources of energy.

As the EIA states in this report, “This projected growth is a result of new generating capacity the industry expects to bring online. About 11 gigawatts (GW) of wind capacity is scheduled to come online in 2019.”

So, the future looks very wind-driven for Texas electricity, and by extension, the nation’s power will continue to be built around renewable sources.

Electricity Rates Are on the Rise Across the U.S.

Electricity rates are on the uptick across the country. According to a report by the U.S. Energy Information Administration (EIA), 78 of 89 utilities proposed a rate increase to their regulators.

To put this number into perspective, the 89 utilities that requested rate changes from their regulators represent almost half of the entire electricity utilities in the country.

In accordance with the law, regulated electric utilities need permission from their regulators before any rates are changed. Historically though, regulators only approve a fraction of the requested rate changes. This means there’s a real disparity between the proposed rates and the delivered changes.

But overall, this begs the question, why were so many regulated utilities requesting price increases in the past year?

Why Rate Changes Are Being Requested

Regulated utilities have needed to request higher rates because of infrastructure costs, electricity generation and delivery, as well as equipment-related costs (among others).

As the EIA states in the aforementioned report, the surging rate increases is a result of higher electricity delivery demands. Electricity delivery is getting more expensive because modern systems for customer information and billing, sustainable energy modifications to equipment, and a more modern grid require a lot of financial support.

Electricity generation also factors into the rising asking price for electricity rates:  nuclear power plants are expensive to operate and maintain as well as ramped up environmental compliance costs.

Events That Lead to Rising rates

When considering large events that necessitate a rise in rates, look no further than these examples provided by the EIA. They state that there haven’t been this many requests for rate changes since the Oil Embargo of 1973-1974, the partial nuclear meltdown at the Three Mile Island plant, and the PURPA Act of 1978.

And recent events like Hurricane Sandy and the Northeast Blackout of 2003 have meant that regulatory bodies are allocating more money for improving the grid and less for reducing the costs for electricity generation and delivery for utilities.

But these complications and rate proposals don’t affect a huge sector of the electricity industry: the deregulated electricity providers in Texas. In fact, none of this is really the case for retail electric providers (REPs) in deregulated parts of Texas.

The Difference in a Deregulated Market

If a REP in a deregulated market wants to adjust their own rates to offset infrastructure costs or increase their revenue, they can do that. But local competition naturally curbs any sharp spike in rates.

Because electricity in deregulated parts of Texas is customer-centric, there are natural pressures to keep prices low. After all, higher rates will drive customers away to the nearest competitor.

So, as the proposals for rates keep increasing for regulated utilities, the invisible hand of the free market continues to self-regulate in various parts of Texas.

We will see how 2019 shapes up as the data is collected.

 

MP2 Energy’s Unique Charging Plan for Electric Vehicle Owners

MP2 has recently announced the commencement of a charging plan solely with electric vehicle owners in mind. The plan is a first in the industry. It will offer free rates to those who charge their electric vehicles during designated, low-cost times, with an increased emphasis on the customization of charging schedules for customers.

As is typical for electric providers, rates vary according to the hour that electricity is used. Peak hours equal peak prices. And because of this facet of the industry, the idea from MP2 is a logical action for the Shell Energy North America subsidiary to take.

Thinking Outside The Box

Incentivizing the use of electric vehicles is actually a pretty important and intelligent move for MP2 to make. It bolsters Shell’s market, it publicly demonstrates a focus on reducing carbon emissions through electric vehicle usage, and the price won’t be as steep due to a utilization of low-cost times for vehicle charge.

But will this incentive translate to even more prospective customers in their retail market? That’s a hard question to answer at this stage, but because the plan is so customizable, they might have a winning formula in its design.

Catering To EV Owners’ Green Side

In addition, the new plan will utilize all renewable energy, the prices are already competitive in the market-so there isn’t a wide discrepancy in MP2’s standard pricing plans–and really, with electric companies specifically looking out for the minority who own electric vehicles, a bit of solidarity is achieved with the move.

Because of the customizable characteristics of the plan, MP2’s retails customers (who own an electric vehicle) in Texas, Illinois, Ohio, Pennsylvania, New Jersey, and Virginia will be hard pressed to find a more flexible plan. And because MP2 and Shell Energy North America work closely with solar and other forms of alternative energy, the creation of energy, and as they state, “everything in between,” their inclusive reach has only grown.

Staying Ahead Of The Competition

Ever since MP2’s inception, the Woodland, Texas based company has prided themselves on the customer service and communication they offer. Their parent organization in Shell Energy was founded in 1995 and provides a lot of reinforcement for the efforts on MP2’s part. And with this move, it will be interesting to watch just how well this translates to customer satisfaction and conversions.

SECC Best Practices Awards for 2019 Are In! Reliant Energy Wins Innovation Award

As has been held for two years now, the SECC awarded five retail electric providers with Best Practices Awards for their continued efforts on recognizing the customer first.

These awards showcase the considerable efforts that companies place in developing concrete approaches for a customer-based utilization of the energy ecosystem. In other words, a lot of resources and creativity are generating some intelligent innovations for retail customers.

Reliant Energy Takes the Best Practices Award

When analyzing the winner of this year’s Smart Energy Innovation Award, Reliant Energy–a subsidiary of NRG–did some strong work with their voice-activated energy management system for retail customers. And considering that NRG-based Reliant has the largest retail customer base in all of Texas, that is a very considerable undertaking.

The innovations Reliant made was done through their plans that integrate Google and Nest technologies to make for seamless management and savings for all customers. This has led to not only ease-of-use for customers with Reliant plans, but also more savings as Nest Thermometers and Google Home Hubs make managing temperatures about as simple as it has ever been. And they moved a step beyond that to offer customers with a way to visualize the data relevant to their energy use.

So, what this really means is that users can synchronize their Reliant accounts with the Google interface and have a 3-dimensional, interactive, management system that not only saves money for customers, but also cuts down energy waste throughout the country, as more people adopt the dynamic of the Reliant Truly Free Weekends Plan and their other offerings. And all of this can be done through voice prompts as simple as, “ Hey Google, show me my electricity usage.”

Austin Energy Receives the Consumer Education Award

There were other awards that were handed out as well that showed the importance placed on a customer-centric approach to business. Just like Reliant, who went above and beyond to make a user-friendly dynamic, so too many other companies invested the time for their fellow citizen.

As is the spirit of the Best Practices Awards, it is one thing to spend a lot of time and effort in innovations that further means of production, but it is another to place an emphasis on educating the general population regarding the energy industry like Austin Energy was awarded for with their Consumer Education Award.

Avangrid Wins the Underserved Markets Award

A similar initiative was made for Avangrid who won the Underserved Markets Awards and their program that placed a large importance in the education of the lower-income bracket of energy consumers.

Entergy and NB Power Garner Kudos

And the other two of the five that were awarded at this year’s ceremony were Entergy, who developed an impressive work environment geared towards customer engagement and client relations, and NB Power who had a portfolio geared towards customer engagement as well.

If the awards show anything at all, it is that being innovative for and transparent with customers shouldn’t be overlooked by retail electric providers out there. They’re the lifeblood of your great state and enterprise.

Texas Generates Most of Its Electricity From Natural Gas

So far in 2018, 45% of the electricity generated in Texas came from the burning of natural gas. That is an increase of market share from the previous year, where natural gas accounted for 38% of the electricity generation in Texas. This should come as no surprise since 25% of the nation’s known gas reserves are located in Texas. Natural gas is cheap and plentiful in the state, and it produces less carbon dioxide emissions than coal.

Coal’s contribution to the electricity grid continues to slide, coming in at 24%. Last year coal accounted for 33% of the state’s electricity generation. By the end of the year, the percentage will be even lower, thanks to a municipal coal plant being mothballed for the winter.

Wind’s contribution to the Texas electricity grid went from 17% to 19%. While that may not sound like much of an increase, Texas is increasing its wind generating capacity at a rate that is triple that of the next fastest state, Oklahoma.

Nuclear and solar did not see a noticeable uptick over last year’s numbers, though that will soon be changing for solar. There are several notable power plants coming online in Texas over the next several years, with solar accounting for 37% of the expected new electricity generation. Of the remaining new electricity production slated for the near future in Texas, wind is expected to make up 47% of it, and gas will be 14%.

Texas has Reinstated the $2500 Electric Car Rebate Program

Texas electric vehicle rebate programAfter a three-year hiatus, the Texas program that gives away $2,500 rebates for electric vehicles, plug-in hybrids and fuel cell cars is back in business. Buyers of compressed natural gas and liquified petroleum gas vehicles could receive up to $5,000.

The Texas Commission on Environmental Quality just released the rules on the the program that was approved last year by the Texas legislature. The program is called the Texas Emissions Reduction Plan (TERP), and its aim is to improve the air quality in Texas. The program was started in 2013, but was shelved in 2015.

To qualify for the rebate, the car must be purchased or leased through an authorized franchise dealership. Tesla buyers, however, are not eligible for the rebate, as Texas does not allow Tesla to sell directly to customers.

This rebate program is only slated to run until May 31, 2019, or until the set-aside funds have run out. Because Texas has 1,000 electric charging stations across the state which makes operating electric vehicles much easier, the funds could run out quickly.

Texas offers other incentives and rebates for drivers that want to be environmentally friendly, as does the federal government. You can search for local and federal incentives by visiting the Office of Energy Efficiency & Renewable Energy website.

Austin Now Has More Electric Cars Than Dallas or Houston

Austin has recently surpassed Dallas and Houston as the Texas city with the most electric vehicles, and it is working hard to make sure it keeps that badge of honor.

In order to keep up with the ever increasing numbers of electric cars on the road, the city’s co-op electricity provider, Austin Energy, is continuing to add EV charging stations in and around the city to be used to top-off commuters who may have failed to get a complete charge at their home. Currently, there are over 650 public charging stations, with new ones coming online every week.

A new initiative for the city is to add state of the art DC Fast charging stations, which can charge a vehicle in 5-20 minutes, as opposed to several hours for a standard charging station. The city has only one of these fast charging stations at the moment, located on Electric Drive, formerly West Second Street. 10 more will be rolled out in 2019, and 24 more by 2021. At a cost of $150,000 for each DC Fast charger, the commitment to Austin’s EV future is evident.

This push to increase the infrastructure for public charging of electric vehicles is needed, as The Electric Reliability Council of Texas (ERCOT) has recently published a report forecasting 1.6 million EVs on Texas roads by 2031. That would mean 20% of all passenger vehicles in Texas will be electric, which translates into 320,000 in Austin.

 

Oncor is Giving Away Free Shade Trees

Oncor has just announced they are teaming up with the Arbor Day Foundation to give away free trees to 4,000 of Oncor customers. The trees are intended to be planted in your yard to help shade your home or your air conditioning unit. Every Oncor customer selected will receive 2 trees, and there are six types of trees you can choose from: Bur Oak, Cedar Elm, Mexican Buckeye, Mexican White Oak, Pecan or Texas Redbud.

Oncor customers have until November 2, 2018 to apply for the electricity-reducing trees, but don’t delay, as the trees will be given on a first come, first serve basis.

To apply, please visit the Arbor Day Foundations’s energy-saving tree website before the deadline. This is the 7th year of the program, and more than 43,000 trees have been planted through this initiative.