Increase in Texas Power Price Cap Could Bankrupt Retail Electric Providers; Find a Financially Viable Provider With SaveOnEnergy.com
The proposed increase in the wholesale electric market price cap in Texas to $4,500 per megawatt-hour, previously discussed by SaveOnEnergy.com , could lead to retail electric providers going out of business, state officials have warned, with such fears privately expressed by several retail electric providers as well. In order to ensure the state has enough power plants to serve increasing demand, the Public Utility Commission of Texas has proposed raising the wholesale energy price cap, which is currently at $3,000/MWh, to $4,500/MWh, effective August 1. The higher price cap, which is rarely hit during the year, is meant to incent the building of new generation, as current generating capacity cannot meet projected demand in the future. However, the August 1, 2012 effective date has raised concerns that it does not give retail electric providers , who buy power in the wholesale market, enough time to prepare for the higher price
Texas Electric Rates Still at Historic Lows, Now Is the Time to Shop
Even as summer approaches, retail Texas electric rates remain at historic lows, making now the best time to shop for a new energy provider with SaveOnEnergy.com. Texas electric rates always go up in the summer as air conditioner demand pushes up prices. But this summer, as previously noted by SaveOnEnergy.com, power prices in Texas are expected to be especially high and volatile because of (1): a shortage of excess generating capacity and (2) an expected 50% increase in the wholesale electric price cap to $4,500 per megawatt-hour. While these factors are already raising the “forward” wholesale prices in Texas — meaning power bought today for future delivery — current retail electric rates remain at historic lows, so customers should take advantage of the market-leading rates on SaveOnEnergy.com while they still can. For example, fixed electric rates for residential customers in Dallas and Ft. Worth , in the Oncor area, are
Customers at Entergy Texas Paying Higher Rates but Can’t Shop for Power
Although most of Texas is open to electric competition which allows customers to save money on their power bills by shopping for a low electric rate , significant parts of the state are still subject to a monopoly utility provider, where customers cannot escape the monopoly’s high rates. While a small number of customers at one of these monopolies, Entergy Texas , may soon have a limited ability to shop for their energy supply, the proposed program has fallen short of expectations that it would provide meaningful competition to customers. The high rates charged by monopoly utilities in parts of Texas not open to competition (El Paso Electric, Entergy Texas, etc.) puts businesses in those areas at a competitive disadvantage versus their competitors in parts of the state open to electric choice , where electric rates are lower. Nowhere is this more clear than at Entergy Texas, whose service area
Most Illinois Opt-Out Aggregations Approved; Illinois Electric Customers Must Exercise Right to Shop for Lower Rates
On the March 20 ballot, close to 300 Illinois municipalities had referenda seeking voter approval to institute “opt-out” municipal electric aggregation programs. Under these programs, customers are automatically switched away from their utility (ComEd or Ameren) for their electricity supply , and are placed with an alternative retail electric supplier chosen by the municipal government, unless the customer affirmatively opts out. SaveOnEnergy.com has previously documented the problems with opt-out municipal aggregation, including most prominently the fact that the savings from these programs are meager, and customers can get lower electric rates by shopping individually for an alternative retail electric supplier. In fact, current savings available from electric suppliers competing for customers on SaveOnEnergy.com are nearly triple the savings offered to customers by opt-out aggregations. However, most of the Illinois opt-out municipal aggregation programs on the ballot were approved, meaning customers must be ready to exercise their right to “opt out”
Start the New Year by Saving on Your Electric Bill with SaveOnEnergy.com
Who doesn’t want to start the new year by saving money? And unlike losing weight or kicking a bad habit, this is a new year’s resolution you can keep, thanks to SaveOnEnergy.com which makes it quick and easy to save hundreds, if not thousands, on your electric bill . In many states including Texas, Pennsylvania, and Illinois, customers can shop for their energy supplier , just as they can choose their long distance carrier, cellular provider, or internet provider. However, because shopping for a low electric rate is still new to most customers, most residential and small commercial customers haven’t shopped for a competing energy provider , and are leaving hundreds of dollars on the table. Consider Texas, for example. If you haven’t shopped for a new electric provider , or just haven’t shopped for a few years, you could be paying a rate as high as 12, 13, or
Competition Bringing Lower Electric Rates to Texas as Prices Rise Nationally
The competition in Texas’ electric industry, which allows customers to choose their electricity provider , has resulted in Texas electric rates falling over the past few years — during the same time that electric rates are on the rise nationally. The Association of Electric Companies of Texas (AECT) recently noted that from August 2006 and August 2011 (the latest data available), the national average electric rate for residential customers rose by 11%, according to data from the Energy Information Administration (EIA). However, during this same time period, the Texas statewide average residential electric price fell by 14%, according to the EIA data. And rates fell even more in parts of Texas where customers have a choice in their electricity provider . AECT noted that when comparing competitive offers from electric suppliers as archived by the state’s Public Utility Commission, the average residential offer in Texas’ competitive electric market dropped by
New PECO Rates Only Marginally Lower; Customers Save More By Shopping with SaveOnEnergy.com
On Tuesday, PECO announced new Prices to Compare for electric customers who do not choose to buy their electricity from a competing electric supplier , and the new PECO rates are still above the low electric rates available by shopping with SaveOnEnergy.com . The Price to Compare is the rate paid for generation supply for customers who buy their electric supply from PECO. Under the competition introduced into Pennsylvania’s electric market , customers at PECO and other utilities can choose their electric supplier and switch to a company offering lower rates. To date, more than half of electricity sold to customers at PECO is provided by competing energy suppliers offering a lower rate. PECO’s Price to Compare will change January 1, 2012. The new residential Price to Compare will be 9.96 cents per kilowatt-hour. While this is marginally lower than the current Price to Compare, it’s still much higher than
Municipal Aggregation Programs Do No Produce Lowest Rates for Illinois Electric Customers
Illinois business and residential electric customers have no doubt seen a lot of news stories recently about a program known as “municipal aggregation” or “opt-out aggregation,” which purports to save customers money on their electric bill . While these programs may provide a marginal amount of savings versus the above-market rate charged by ComEd or Ameren, these municipal aggregations do not maximize savings for customers, and worse, keep customers from shopping for more advantageous rates. At its core, municipal aggregation is government-sponsored “slamming” — or the switching of customers to a new electric supplier that the customer has not affirmatively chosen. All the residential and commercial electric customers in a town are automatically pooled together, unless the customer affirmatively “opts out” and chooses their own electric supplier . For customers not opting out, the town selects a new energy supplier , replacing the utility, at the town’s discretion, and all
Two Texas Retail Electric Providers to Cease Operations; S&P Sees More Exits Looming
In what may be the first of several, two Texas retail electric providers have filed with the Public Utility Commission to relinquish their electric provider certificate and withdraw from the market. Meanwhile, a new report from Standard & Poor’s Ratings Services says that small retail electric providers , “may have trouble surviving” in the Texas energy market . SaveOnEnergy.com has alerted Texas electric customers over the past few weeks of the precarious financial situation that some of the electricity providers may be in, due to the extreme heat and the volatile wholesale energy pricing during August, and that customers should check to make sure that they are with a financially stable electricity company . Now come tangible signs of these problems. Two Texas retail electric providers — Pocket Power (organized as Monongahela Communications LLC) and Chain Lakes Power (which traded as Simple Power) have filed to relinquish their supplier licenses at
Top Power Executive Expected Retail Electric Provider Defaults in Texas
During an October 3 investor call, NRG Energy Chief Executive Officer David Crane said that he had expected a number of retail electric providers in Texas to go out of business due to the extreme heat and wholesale energy price shocks which strained retail providers during the entire month of August, and said that he anticipated significant “fallout” from the wholesale market price spikes which ate into retail electricity providers’ profits and stressed their balance sheets. ” [I] t was a very, very difficult month to be a retailer in Texas,” Crane said. NRG runs retail providers Reliant Energy , Green Mountain Energy, and Pennywise Power. To date, there have been no public defaults by retail electric providers as a result of the challenging market environment, and while there have been one or two sales of retail providers, none were definitively linked to the extreme market conditions in August. However, it’s