By Jennifer Litz
Editor
January 5, 2008

Texas electricity deregulation began in 2002. Just as deregulation of the telecommunications industry in the 1980s helped consumers choose (and obtain bargains) on their long distance telephone service, energy deregulation provides similar choices in choosing your electricity provider. Still, about half of residential consumers haven’t done their homework to find the best electricity provider for them, according to Terry Hadley, spokesman for the Texas Public Utility Commission. “They are almost certainly paying a much higher rate,” Hadley says.

“This is a big change is required in people’s thinking. Forever literally, in terms of electricity, customers are not used to shopping for an electricity provider. So that takes time to get used to that—‘shopping’ on their own to get the best value.”

The first stop for electricity “shopping” is the State’s Web site resource, www.powertochoose.org. It has several tips for discerning among providers, as well as their recently quoted prices and other information. Local customers should click on the AEP North Texas Area, the transmission utility for San Angelo.

 

Of course, price is likely the No.1 criteria for this kind of “shopping.” There’s a link on the PUC Web site that sorts providers by price. “Some are now below 10 cents a kilowatt hour, which is a very good price for the San Angelo region,” Hadley says.

 

Price isn’t the only consideration. There are also contract terms to wade through. Some providers have month-to-month variable prices—which may be favorable when electricity prices drop—while others offer relatively stable prices for a year or two. “Customers want to find a comfort level,” Hadley says. “Like, ‘Do I want to check my price every month, or am I more comfortable knowing what I’ll pay for a year or two?’”

Price and contract—what else could a person possibly want? Going “green” is gaining popularity.

“In general, the increase in interest in renewable energy is growing rapidly,” Hadley says. “Now we know that about 5 percent of electricity is generated through wind power in Texas. That is growing, and there is a greater demand for it.”

Price, contract term, environmental friendliness . . . The last criteria for most would be customer service. Enter Kent Beagle at TexStar Power in San Angelo , the first place since deregulation where regional customers can sign up for electric service. TexStar is a brokerage that works with several line owners (AEP, TXU, Centerpoint are just a few) that transfer electricity from generator plants to customers in San Angelo.

Though Beagle says the line owners they work with have all been hand-picked for their history with customer service and conflict resolution, there is still almost too much “small print” and too many variables for the “lay” customer to navigate on his or her own.

“When you look at the fact sheet on a company, you gotta do math,” he says. “Mathematically, there could be a base charge under the price per kilowatt rate. For example, with our one company, if you use 1,000 kilowatts a month or more, there’s no base charge. But if you use 999 kilowatts or less, we charge $5.25 total in addition to the energy charge; that helps us cover billing costs.

“Our other company, Spark Energy, doesn’t charge a monthly base fee because they have no overhead—it’s all electronic. You get an ebill and pay online. That’s another other thing people need to be careful of—fluctuating prices.

“WTU has a four-tier pricing system, and during peak demand months, like during the summer, their rates are higher. And for the other three quarters they have other pricing tiers. And if you [get price quotes] during a low peak, you’re going to see a relatively good price; but in summer months, it can go up to 18 cents kilowatt hour, somewhere in there. They’re basically at 15.9 cents. It changes not daily, but once in a while, and the only accurate way to get pricing is to go to the PUC website.”

“Unless you talk to someone knowledgeable about it, it’s hard,” Beagle says. “And that’s the problem with the system right now. A lot of people are disillusioned with deregulation because they switched companies thinking they’ll get a better rate and they didn’t. But there’s just not enough info to make a wise decision.”

Hadley says revisions are still being made to the State’s powertochoose.org site. In the meantime, customers are encouraged to do as much information collecting and comparing—with as much help—as possible.