NCPA - National Center for Policy Analysis


April 20, 2006

Texans are benefiting from electric competition ushered in by Senate Bill 7 enacted by the Texas Legislature in 1999. The bill introduced competition into the Texas retail market for electricity beginning Jan. 1, 2002, says M. Ray Perryman, Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.

What has competition done for the Texas retail electric market?

  • In the Dallas-Fort Worth area and other TXU territories, 14 retail providers exist. By shopping the easy-to-manage site, consumers will find they can save as much as 11 percent, or about $16 a month, on the average bill. TXU even has a Price to Beat (PTB) offer (TXU Energy Market Tracker) that will save you 7 percent.
  • In Houston, a shopper can save as much as 13 percent. In smaller markets such as Corpus Christi and San Angelo, comparable savings await.
  • While more Texans can save extra if they avail themselves of the opportunities, Texas still remains the leader in customer switches, with more than 2 million switches completed. By all accounts, Texas is home to the most competition in the United States.

Although in many states the process of opening electric markets to competition has met with challenges, Texas has clearly avoided the most serious of these problems. Even with the highly publicized instances of difficulties in states such as California and New Jersey, the overall impact of the move to competition has been positive, says Perryman.

Economic benefits and savings on rates are growing much more rapidly than was even imagined at the outset of competition -- with customers having achieved direct-cost savings in the billions. Moreover, says Perryman, consumers could save even more if they would only shop the Public Utility Commission of Texas' Electric Choice Web site,

Source: M. Ray Perryman, "Power competition has benefited Texas," Fort Worth Star-Telegram, April 16, 2006.


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