Texas electric rates

Is Reddy Kilowatt running wild in Texas?

The Fort Worth Star Telegraph has a long article that looks at electric rates in Texas and why our rates are different from other states. The Public Utility Commission provides Texans with the Power to Choose web site that shows the different rate plans available.

There are (at least) two interesting issues reflected in the article.

One issue is the value of deregulation. Certainly, Texans have not fully realized great savings from the deregulation of electricity in Texas. However, some of that failure may result from the failure of consumers to shop around for electrical rates. In consumers’ defense, the plan offered present a number of dilemmas for Texans as they weigh the implication of fixed rate plans with large ($150 seems typical) cancellation fees with variable rate plans that leave them subject to the dramatic shifts that can occur when demand increases in heat of the Texas summer. Enough consumers have probably wandered into problems with complex cell phone plans and don’t relish additional risks.

Another issue is Texas’ resistance to tying into the national power grid. On one hand, remaining out of the national power grid allows Texas energy produces to avoid some federal regulations. At the same time, tying into the grid would allow Texas providers to sell surplus electricity when they have surplus capacity and buy electricity when there are shortages. Maintaining excess capacity can be expensive and the bill for maintaining excess capacity is passed on to consumers.

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