Texas Coalition for Affordable Power Says Texas Prices Higher Under Deregulation

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February 15, 2011  

As is the case every legislative session, the Texas Coalition for Affordable Power (formerly the Cities Aggregation Power Project and the South Texas Aggregation Project), this time in concert with the Steering Committee of Cities Served by Oncor, has put out yet another report on the ERCOT market, alleging that deregulation has raised consumer prices.

The report, titled The Story of ERCOT, largely relies of Energy Information Administration Form 826 and 861 data.  However, Form 861 data, which allows the pricing breakdown between areas within ERCOT with and without customer choice, is only available through year-end 2009.  Based on such data, TCAP claimed that Texans, “served by deregulated providers consistently pay more for electricity than Texans served by non-deregulated providers.”

The Association of Electric Companies of Texas responded by citing EIA Form 826 data (as of September 2010, the most recent data used in several places in the TCAP report) to show that Texas' national price ranking has improved since 2001.  Additionally, again using September 2010 data, the lowest all-in, 12-month fixed price from REPs in nearly all service areas was below 9¢/kWh, while the U.S. average all-in price was about 12¢/kWh.

As of September 2010, most cooperatives were charging rates in excess of 10¢/kWh for residential service, while many 12-month fixed REP prices were below this threshold.  Even the average of all fixed offers from REPs across the service areas (in the 10¢ range) were lower than most cooperative rates, which generally neared or exceeded 12¢.

AECT also cited, using January 2011 REP rates, bill decreases of 20-68% at CenterPoint and 22-61% at Oncor versus the last regulated prices as of December 2001, with savings depending on which rate plan the customer may currently be on.

Aside from its pricing review, the TCAP report also purports to have "found" a "loophole" that, "allows some electric generation companies to engage in anti-competitive activities."  Ostensibly this refers to the small-fish-swim-free exemption (ostensibly because despite 110 pages, the report does not address the genesis or rationale for the rule, its importance in an energy-only market where load is not saddled with administrative capacity payments, or the specific Substantive Rule for this "loophole").

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