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May 18, 2018 • EPE Related News

San Antonio Business Journal: Report: Electricity price gap between regulated, deregulated Texas markets shrinks

The gap between electricity prices in regulated and deregulated markets in Texas is the smallest it's been since deregulation went into effect more than 16 years ago.

Texans in deregulated electricity markets paid an average residential rate of 11.38 cents per kilowatt-hour in 2016, according to a 20-page report released Thursday by the Texas Coalition for Affordable Power. That's less than the national average of 12.55 cents per kilowatt-hour but higher than the average in regulated electricity markets such as San Antonio, where CPS Energy'sresidential customers paid an average of 11.1 cents per kilowatt-hour during the 12 months ending April 2018.

Lawmakers deregulated electricity in Texas in 2002 but allowed cities such as San Antonio, Austin, San Marcos and El Paso — as well as areas served by electric cooperatives — to remain regulated markets with a single provider.

The bifurcated systems allows for price comparisons between markets, which the Texas Coalition for Affordable Power monitors. Over the past 16 years, residential electricity prices in deregulated areas have consistently been higher than those in regulated markets. Now, however, that price gap is as small as it's ever been.

“We have been conducting this report for years, and this is the most encouraging one yet for Texans living in areas with retail electric deregulation,” coalition Executive Director Jake Doegey said. “Average deregulated prices continue their decline … . However, given that the price gap has stubbornly persisted, it’s clear that the deregulated market could do better."

Looking ahead, the report shows that rates charged by the state’s two largest transmission and distribution providers have increased beyond the level of inflation — and that those transmission and distribution rates make up a larger proportion of home residential bills than they did previously.

In San Antonio, CPS Energy executives scrapped plans to request a rate increase this year but plan to revisit the issue in the fall when they are expected to consider electricity and natural gas rates for 2019.

Source: https://www.bizjournals.com/sanantonio/news/2018/05/18/report-electricity-price-gap-between-regulated.html#i/10906462