Retail electricity providers often offer lower rates, survey finds

September 24, 2009

Fort Worth Star-Telegram

Jack Z. Smith

Retail electric providers in Texas’ deregulated market are offering residential rates that in many instances are lower than those of some municipal power companies, electric cooperatives and investor-owned utilities that are still under rate regulation, a Star-Telegram survey shows.

A decade after the Texas Legislature passed a law authorizing deregulation, retail electric providers compete intensely to win new customers. They have sharply lowered rates in response to a plunge in prices for natural gas, which is burned to generate much of the electricity produced in Texas.

Deregulation critics have frequently noted in the past that residential electric rates in the deregulated market were considerably higher than those charged by municipal power companies, called “munis,” rural and suburban electric cooperatives and investor-owned utilities, or IOUs, in areas such as the Texas Panhandle and East Texas that are outside the deregulated market. But that price gap appears to be narrowing, the Star-Telegram analysis shows.