Competition in the Texas electric market means that energy providers have created a wealth of new products and services designed to meet customers’ individual needs and lower their electric bills.  Such new products include fixed priced plans which give customers budget certainty, time-of-use plans that let customers take advantage of lower rates during off-peak times, seasonal rates designed for customers with electric heat, prepaid products for customers looking to avoid costly deposits, and many more.  Soon, Texas electric companies will be offering electric plans designed specifically for customers with plug-in electric vehicles.

One of the newest products introduced last year by several Texas energy companies is a program where customers with distributed generation — like rooftop solar panels — may sell their excess generation back to their energy supplier.  Not only do these customers save money by generating their own power, they receive a credit when they generate more power than they need, further reducing their monthly electric bill.

However, such product innovation is typically only available in parts of the state where customers can choose their electric company.  While about 85% of Texas’ electric customers have such choice, several areas, such as El Paso and San Antonio, do not have electric competition, and customers cannot choose their energy supplier.  That means customers are stuck with whatever their monopoly utility offers them, and there is no product innovation or money-saving alternatives aside from what the utility decides to do. 

For example, El Paso residents with rooftop solar systems can’t contract with an energy provider to buy back their excess solar generation, like customers in Houston, Dallas and Corpus Christi can do under electric competition.  State Sen. Eliot Shapleigh noted that in Houston, thanks to the solar buyback program available under electric choice, some customers’ monthly electric bills were actually credits of $20 — that is, they had zero electricity charges, and were being paid $20 per month to credit their solar generation.  Customers with electric choice can make providers compete for their excess solar power, and be paid a price anywhere from 7.5¢ per kilowatt-hour to 10¢ per kilowatt-hour for their extra energy.

El Paso Electric, meanwhile, remains a, “1950s electric company,” Shapleigh writes, and does not offer the innovative, money-saving options that are available under electric choice.

With customer choice forcing Texas electric companies to compete for customers’ business, Texas electric rates have gone from above the national average before competition, to below the national average.  However, that’s not the story that’s typically reported by the media, because the federal Energy Information Administration is using flawed data which underestimates the significant decline in Texas power prices since the start of competition, according to a new study by the Texas Public Policy Foundation (TPPF).

“Most competitive prices are considerably lower than what is reported in the federal government’s data,” said Bill Peacock, Director of the Foundation’s Center for Economic Freedom. “In fact, the average competitive price is below the national average, and consumers who exercise their choice can easily find rates that are lower than in our neighboring states.”

TPPF found that the average electric rate offered by electric companies in the competitive regions of Texas in December 2009 was 11.01 cents/kWh, while consumers could choose offers as low as 8.52 cents/kWh.  However, the federal Energy Information Administration (EIA) reported that Texas consumers paid an average of 12.26 cents/kWh in October 2009 (the most recent month of data).

For 2009, the EIA data shows a national average price of 12.06 cents/kWh.  According to EIA, the average Texas rate is 12.26 cents/kWh, but in reality, the average Texas rate in parts of the state open to competition is actually lower — only 11.01 cents/kWh.  Texas energy prices are thus below the national average in areas where Texans can choose their energy provider. 

Why does the EIA data show a higher Texas electric rate?  There are a few reasons, but one of the biggest reasons is the EIA blends rates from parts of the state open to competition with higher-priced rates at some of the monopoly utilities and cooperatives, some of which, as previously noted, have higher rates than competitive areas.

Not only are competitive Texas electric power rates lower than the national average, but competition has actually reversed Texas’ relative position versus the national average.  For instance, in 2001 just before competition started, the regulated average energy price in the parts of the state that would later be opened to customer choice was 15.8% higher than the national average, at 9.98 cents/kWh versus the national average of 8.62 cents/kWh.  Today, however, the average competitive price (11.01 cents/kWh) is 8.71% below the national average, while the average of the 15 lowest Texas offers (9.27 cents/kWh) is 23.13% below the national average.

The data shows that, over the past nine years, competition has kept Texas electric rates in check, resulting in Texas rates rising more slowly than the national average, and turning Texas from a state which had above average power prices to below average power prices.

Texas’ competitive electric rates also compare favorably with several neighboring states, as the average price of the 15 lowest offers in Texas is lower than the average price in New Mexico, Oklahoma, and Arkansas.  Furthermore, Texas power prices are lower — significantly in many cases — than the average price in the other four of the five largest states, such as New York (19.17 cents/kWh) and California (14.08 cents/kWh).

“Perhaps the lower price of electricity in Texas is one reason it has recently moved past New York and California as the home to the most Fortune 500 companies,” Peacock said.

If it’s been more than six months since the last time you’ve shopped for an electric rate, you’re probably paying too much, as Texas energy prices have fallen drastically in the past year.  By using SaveOnEnergy.com to find the lowest Texas electric rate, you could easily pocket $30, $40, or even $50 per month in savings on your electric bill. 

SaveOnEnergy.com takes the guesswork out of finding the lowest electric rate.  Instead of having to sort a mountain of competing offers from dozens of electric companies, SaveOnEnergy.com takes the lowest rates from the best, most reputable energy providers, and stacks them up side by side, so you can easily find the rate that’s best for you.

That means you can compare energy prices in just a few minutes, instead of making it a massive, time consuming project.  Rather than spending hours trying to find some savings on your monthly expenses, SaveOnEnergy.com lets you, in just a few minutes with a few clicks of the mouse, find a low electric power rate that could save you up to $600 per year, depending on what your current rate is.  The last time most Texans thought about electric rates was in the summer of 2008, when electricity was in the news because of high price spikes.  If you locked-in a rate during this time, to avoid further price spikes, you may be paying 14¢ or 15¢ per kilowatt-hour.  Since the summer of 2008, Texas energy prices have fallen by more than a one-third, and low rates can now be found on SaveOnEnergy.com at 9¢ or 10¢.  Simply by switching from your current high Texas electric rate to a new low rate on SaveOnEnergy.com, you can capture these savings, and put more money in your pocket.

SaveOnEnergy.com doesn’t just let you compare low electric rates, however.  It also presents a straightforward comparison of other, value-adding options that Texas electric companies offer, which can stretch your hard-earned dollar even further.  For example, some energy suppliers offer bill credits for enrolling with them up to $75, or even one month’s worth of free electricity, which makes a low rate even better.  Other energy providers offer bonuses like gift cards or gift certificates, airline miles or free airfare, or other benefits for choosing them as your new provider.  These bonus features, which are easily identified on SaveOnEnergy.com, can help you make a choice between two electric companies with the same low rate, or a marginal difference between the two rates.  In this way, SaveOnEnergy.com saves you both time and money, by letting you compare all aspects of an electric company’s product — not just the rate — against its competitors, so you can easily find the plan that best works for you.

Last week the Public Utility Commission (PUC) of Texas imposed a total of $3.7 million in penalties on two retail electric providers related to their default in 2008, which left thousands of customers “stranded” and forced to pay a very high energy price.  The penalties are a reminder of the dangers of going it alone when looking for a lower electric rate, as history has shown that not all electric companies are equally dependable and stable.

The PUC’s fines date back to the high prices experienced by Texas customers in the spring and summer of 2008, and the failure of two energy providers: National Power Co. Inc. and Pre-Buy Electric LLC.  Both suppliers, prior to running into trouble, had some of the lowest electric rates in the market, enticing customers to sign up with these firms.  However, both companies lacked proper internal controls and risk management processes to serve customers reliably.  When wholesale electric prices soared, these companies had not hedged their purchases in advance, and could not cover the exorbitant costs of serving their customers.  The end result was that thousands of these companies’ customers, who had been promised some of the lowest electric rates in the state, were shifted to the emergency “back-up” electric company, known at the Provider of Last Resort.  In some cases, the rates customers ended up paying for the emergency Provider of Last Resort service was more than double the rate they were promised from their original electric company.

The risk of your energy provider going out of business is one of the top reasons you should not go it alone when trying to find the lowest electric rate.  There are about one hundred electric companies in Texas, most of which are new start-ups with little operational history or record.  Even the most diligent customers doing their homework will be frustrated by the lack of available information on energy suppliers, which makes evaluating the technical fitness and managerial competency of a potential provider difficult, if not impossible, for the average customer.  The less stable companies naturally try to lure in customers with tantalizingly low prices, but such offers are merely a mirage when the supplier can’t honor its commitment and forces the customer to pay a rate double the original price.

That’s where the industry experts at SaveOnEnergy.com can not only save you time by pitting the rates of the top energy suppliers against each other, but can also give you peace of mind that the low rate you find on SaveOnEnergy.com will be honored by your energy provider. 

With decades of experience in the energy industry, SaveOnEnergy.com’s experts screen every supplier against a rigorous criteria evaluating financial fitness, managerial competency, risk management, and internal controls so that only suppliers that can stand behind their rate are recommended.  By conducting a thorough audit of the supplier’s business practices and strategy, SaveOnEnergy.com determines whether the supplier is a viable provider, or rather is a fly-by-night operator with questionable operational practices that could lead to problems, even default, in a turbulent market.

By using SaveOnEnergy.com to find the lowest electric rate, Texas customers can be assured that their low rate will be honored for its full term, and won’t disappear at the first sign of market unrest.  SaveOnEnergy.com takes the risk out of shopping for a lower electric rate, and eliminates one of the many worries first-time shoppers have about switching electric companies.

Texans usually start to think about the size of their electric bills as summer heat approaches, but the arctic temperatures blanketing the State for the past few weeks have led to record power usage driven by customers with electric heating, and provide a good reminder that now is still a great time to save on your electric bill by shopping and switching to a new lower electricity rate.

The Electric Reliability Council of Texas (ERCOT), which includes the electric transmission lines for 85% of the state, reported that it reached a new record for peak winter power usage at 55,856 megawatts during the 7-8 a.m. period Friday.  That demand broke the day-old record of 52,001 megawatts set during the 7-8 a.m. period Thursday.

Before the recent cold snap, the winter demand record was 50,408 megawatts set Feb. 16, 2007.  The new record also far outpaces ERCOT’s forecast of peak usage for this winter, which was only 43,463 megawatts, or about twenty-five percent lower, as the forecast was based on normal weather patterns and reduced usage due to the recession.

While Texas is seeing record electric consumption for the winter, the usage is still shy of the annual peak demand which occurs in the summer due to heavy air conditioning usage.  ERCOT’s all-time peak demand is 63,400 megawatts, set this past summer on July 13, 2009.

“Most Texans will see higher February electric bills due to the weather-related consumption in January”, says SaveOnEnergy.com spokesperson.  “That makes it a perfect time to see if you can save money on your electric bill by shopping around for a lower electric rate”.

Many Texans may still be paying a higher rate of 12¢, 13¢, or even 15¢ per kilowatt-hour, based on when prices were higher and the economy was stronger.  With the recession and more competitive offers, energy prices have plummeted, and there are numerous plans available on SaveOnEnergy.com for 10¢ or less.

For example, customers in the Dallas-Fort Worth metroplex, served by Oncor, can use SaveOnEnergy.com to sign up for a six-month fixed rate of only 9.4¢ per kilowatt-hour.  A 12-month fixed rate, providing even more security against price spikes, is only 10.3¢.  In Houston, fixed price rates are as low as 10.1¢.

Using SaveOnEnergy.com to shop for a lower electric rate takes just a few minutes, and is hassle free.  All the electric companies on SaveOnEnergy.com have been thoroughly vetted so only reputable energy providers with world class customer service are listed, ensuring that customers don’t worry about their choice of energy supplier and savings.  With just a few clicks of the mouse on SaveOnEnergy.com, Texans can save hundreds of dollars per year on their electric bill, all without leaving the comfort of their own home.

The Electric Reliability Council of Texas (ERCOT), which runs about 85% of Texas’ electric transmission system, said recently that the state is projected to have enough power through 2013.  Starting in 2014, based on current projections, the state could dip below a minimum 12.5% “reserve margin,” or the amount of extra power the state requires in excess of projected demand as a safety net.  Currently, the 2014 reserve margin is forecast at 12.3%. 

The reason for the drop is the delay of a new power plant that was originally scheduled to come online in 2013, but has been pushed back due to economic considerations.  Specifically, the Cobisa Greenville Project, a 1,792-megawatt natural gas-fired plant, won’t go into service in 2013 as originally planned.

One of the main reasons for the delay in new power plants is the low energy prices currently being enjoyed by Texas electric customers.  While the economic recession and competition among electric companies have pushed rates below 10 cents in most areas, the recession has also stalled many power projects as developers wait until Texas power prices rise with the economic recovery before moving forward with their projects.

However, while the reserve margin is projected to dip below the minimum level needed for reliability after 2013, there is no cause for great alarm, because there is sufficient time for power developers to respond to market signals and build new generation in time to meet reliability needs.

In fact, it is typical for power projections five years out to show capacity below the minimum reserve margin.  For example, in 2007, ERCOT projected that for 2010, reserve margins would be only 8.3%, well below the minimum of 12.5%.  However, as 2010 grew closer, generation developers responded to market signals and built new generation to meet the projected demand.

Here is a look at how the forecast reserves for 2010 increased over time, as new power plants were built in response to the forecast demand.

Date of Forecast                         Projected 2010 Reserve Margin

May 2007                                  8.3%

Dec 2007                                   14.0%

May 2008                                  17.3%

Dec 2008                                   21.2%

May 2009                                  20.1%

Dec 2009                                   21.8%

As can be seen, while 2010 supplies were projected to be below the reserve margin three years ago, new projects came online to meet, and exceed, the forecast demand.  This market response is one of the many benefits of the competitive Texas electric market, as customers no longer pay for extra power that isn’t needed.

Under the traditional monopoly system, power plants were planned years in advance, based on forecasts of demand, which, like any forecast, were simply educated guesses.  That often meant more power plants were built than were actually needed.  But customers still had to pay to build those power plants because monopoly utilities were guaranteed a regulated rate of return.  Another problem often encountered was known as the “gold plating” of the electric system — or building many more power plants than needed to serve customers to increase a utility’s regulated rate base, on which it made profits.  With competition, generation developers do not earn a guaranteed rate of return, which means customers only pay for plants that are actually used, saving them millions of dollars annually.

With 2010 right around the corner, many Texas families will be looking at their household budgets for the coming year, and looking for ways to save extra money, especially in this recession.  By using SaveOnEnergy.com to find a low electric rate, Texas customers can save hundreds of dollars per year which can help pay off any Holiday bills and make tight budgets go farther in 2010. 

Many customers last shopped for an energy price in 2008 when prices were much higher than they are now.  Your electric bill will show your monthly rate for electricity, expressed in cents per kilowatt-hour, listed as “The average price you paid for electric service this month,” or a similar description.  This is the price you should use to compare with other electric companies, and how you can determine how much you’d save by switching to a lower rate.

For example, let’s say you’re a customer in the Dallas area, in the Oncor service territory.  If you were currently paying 14.0¢/kWh for electricity (a typical rate many customers had in 2008), and used 1,000 kWh every month, your monthly bill would be $140 ($0.140 x 1,000 = $140).

Now, consider some of the much lower rates available in the Dallas areas on SaveOnEnergy.com.  For example, using SaveOnEnergy.com to compare Texas electric power rates, you could find a six-month, fixed price plan with a rate for 9.4¢/kWh.  To calculate your savings, first calculate your bill with this new, lower rate under the same usage of 1,000 kWh ($0.094. x 1,000 = $94).  Your monthly bill would be only $94 or a savings of $46 every month, just for switching energy providers.  Over a year, this would equal a savings of $552, based on average usage of 1,000 kWh every month.  Savings for a typical 1,600 square foot home could easily exceed $900 per year.

If you wanted to lock in a lower rate for a longer period such as 12 months, you can still find substantial savings.  In the Dallas area, SaveOnEnergy.com shows a 12-month fixed rate of 10.1¢/kWh, a low rate that gives you both savings and price protection for one year.  Using the example above, if you switched to this rate, your monthly bill would be $101 ($0.101 x 1,000 = $101).  If you were currently paying a high rate of 14¢/kWh, you monthly savings would be $39, for yearly savings of $468. 

With household budgets tighter than ever these days these savings are invaluable, and the best part is saving hundreds of dollars on your electric bill can be completed in just a few minutes using SaveOnEnergy.com, without any hassle or risk.  Because SaveOnEnergy.com screens all its energy suppliers with rigorous criteria, you can be assured your selected energy provider is a stable, reputable company that will stand behind its rates with high levels of customer service.

California residential utility customers who use the least amount of electricity will have their electric rates raised in order to lower the rates for residential customers who use more power, under an order from the state’s Public Utilities Commission (PUC).  Unfortunately, although more California businesses will soon have the opportunity to buy power from an energy supplier other than their utility, legislation specifically prohibits the vast majority of residential customers for shopping for a low electric rate.  That means customers facing this new rate hike have no choice but to grin and bear it.

The Public Utilities Commission’s decision lifts a rate freeze imposed on residential customers in the two lower usage tiers, which was originally imposed during the 2000-01 energy crisis.  The PUC did not freeze electricity rates for residential customers in the three higher tiers of usage, and these customers have had to shoulder the share of any required rate increases because of the freeze for small volume customers.

In most states, when a rate freeze comes off, customers are given the option to choose a new energy provider to avoid the increase and save money.  For example, at PPL Electric Utilities in Pennsylvania, rate caps are expiring on January 1, 2010, and utility rates will rise about 30%.  However, customers are able to shop among more than half a dozen competing energy companies to find a lower energy price, and can save up to 20% on their bills.

California residential customers do not enjoy this right to choose their own energy supplier, so they cannot avoid the utilities’ rate increases.  Unlike business customers, whom we’ve noted will soon be able to shop for a low electric rate, residential customers in California are required to remain with the utility.  That means they can’t vote with their feet when the utility raises rates, especially when the increase can be seen as punishing energy conservation.

As noted by the San Francisco Chronicle, “Critics have complained that the change hurts people who conserve energy while helping those who don’t,” because it lowers, or subsidizes, prices for large energy users by making those who use less electricity pay more.

When customers can choose their energy provider, such inequities are not possible.  If customers feel that their electric company is treating them unfairly or charging a rate that’s too high, they can choose another provider and vote with their pocketbook.  This is the powerful tool that more California businesses will soon enjoy as the PUC allows more non-residential customers to shop starting in April, and will help businesses trim their energy costs.  Unfortunately, California residents still do not enjoy the right to choose their energy provider.

The California electric utilities have given the first indication of how many customers will be able to shop for a lower electric rate under the state’s expansion of electric competition, known as direct access, which is subject to a cap. 

In filings with the state’s Public Utilities Commission, the three largest utilities reported, according to statutory criteria, their proposed cap levels for the amount of business customer load able to be served on direct access:

Pacific Gas & Electric: 9.5 billion annual kilowatt-hours

San Diego Gas & Electric: 3.5 billion annual kilowatt-hours

Southern California Edison: 11.7 billion annual kilowatt-hours

These cap levels must still be approved by the Public Utilities Commission.

Since annual electric usage among business customers varies wildly from millions of kilowatt-hours for heavy industries to just a few thousand kilowatt-hours for small businesses, it’s impossible to place any meaningful estimate on the number of California businesses that will be allowed to shop for a lower electric rate under the cap.

However, according to the Energy Information Administration, the average electricity use of a California industrial customer is nearly 650,000 annual kilowatt-hours.  At that rate, the number of customers allowed to shop for electricity at Pacific Gas & Electric would be limited to 14,000 customers out of about 1 million non-residential customers in its service area (or just 1%). 

Because the largest electricity users are always the first to shop for a lower rate (since electricity is a bigger cost for them), the shopping cap in California could quickly be reached as several very large industrials with extraordinarily large power usage take up all the room under the cap.  That could leave mid and small-sized businesses unable to shop for a lower energy price, even though they could save thousands of dollars from being able to shop.

That’s why customers need a partner like SaveOnEnergy.com to take advantage of their ability to shop for cheaper electricity as soon as it is enacted, which is expected in April 2010.  The experts at SaveOnEnergy.com can not only help your business find a low electric rate, but can streamline the shopping process so you can submit your switch to a new energy provider as soon as you are able, maximizing your chance to be allotted space under the direct access cap, and realize the savings available from shopping for electricity.

As California continues to move towards giving more business customers a choice in their electricity company, customers must take action to benefit from the competition among energy providers in order to get a low rate for their electricity.  As noted last week, all types of commercial customers, from large institutions like universities to small retail stores, can save thousands, if not millions, by simply shopping for a new electric service provider, and using competition to get a lower electric rate.

But since competition, or direct access as it’s known in California, has been suspended for eight years, most businesses aren’t even aware that they will soon be able to shop for a lower electric rate, let alone be ready to undertake the complex and time consuming process to compare different types of electric rates and products, vet potential energy companies, and make an informed decision about the best electric plan for their business.

That’s where SaveOnEnergy.com can provide invaluable assistance to California businesses searching for a lower energy price.  SaveOnEnergy.com makes finding a lower electric rate as simple as a few clicks of the mouse, taking the hassle and confusion out of shopping for a new energy provider.  And by pitting up to eight energy suppliers against each other in head-to-head competition for your business, SaveOnEnergy.com ensures that you’ll get the lowest energy price without devoting countless hours to researching and comparing suppliers.  With SaveOnEnergy.com, saving money takes just a few minutes. 

With SaveOnEnergy.com’s exclusive retail exchange portal, shopping for a lower electric rate for your business is a breeze.  All you need to do is enter some information about your business, such as location and electricity usage, and the information is instantly transmitted to up to eight competing energy suppliers.  These providers then contact you directly with their lowest offers, knowing that they’ll have to beat seven other suppliers in order to win your business.  This puts the power of electric choice at your fingertips, and takes the work out of saving money.

And because SaveOnEnergy.com screens all of its energy suppliers against a rigorous criteria, you can be sure that not only will you get a low electric rate, but you’ll also find a stable and financially sound supplier that provides high levels of customer service and innovative products. 

The experts at SaveOnEnergy.com can also help you compare different types of offers, and recommend which type of offer is best for your business.  Thanks to competition, electric companies can now offer customized rates with fixed pricing, variable pricing, blended pricing, and all kinds of individual solutions that best meet the needs of your business.  However, to the average customer not versed in the electric industry, all these options can be overwhelming.  By working with SaveOnEnergy.com, customers can receive an “apples-to-apples” comparison of different products, to decipher which product truly provides the lowest cost, so businesses can maximize the benefits of electric competition.