According 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!