If you live in Texas, perhaps you already know that you’re lucky to be living in an area where the electricity markets have been deregulated. Why? This gives you much more choice and much more power over the quality of service and the prices you pay for that service than folks who don’t live in deregulated markets have. You also have a choice in most cases as to whether or not you want that energy to be “green” or traditional. And now, the experts agree that indeed, Texas’ electricity deregulation is a success.
Experts have said that both “qualitatively and quantitatively,” Texas has had “an overall successful competitive power market experience,” according to Susan Tierney, who authored a study commissioned by Reliant Energy, Inc.
According to the study, retail and wholesale market alignment has been a major factor for deregulation’s success. Consumer education, and the regulatory environment in Texas in general have also affected how successful this “experiment” has been. Texas has unique structural attributes that make it right for this type of structure to flourish, because of options market rules, transparent pricing, low barriers to market access and to entry, and the number of buyers and sellers, among other attributes.
Other things that have made Texas electricity deregulation a success include the cost and diversity of suppliers and products, options and choices, market choices, and renewable energy resource options, as well.
The history: Before deregulation
It does make sense that deregulation would be a success for Texas, not least because deregulation removed the ability for what were then energy monopolies to sit on their hands and refuse to make improvements in the power infrastructure, or improvements as to efficiency or “green” energy resources. Simply, they didn’t have to, because they had no competition; consumers were helpless to do anything, and simply had to take what they were given. Because of this setup, customer service, too, was a relative nonentity in that these monopolies didn’t have to make their customers happy; they were more focused on making a profit that pleased stakeholders, and they certainly did so.
Bureaucracy ruled what utilities could do in so far as building new power plants, too. Because they had to negotiate with state regulators as to how they built those plants and how they could pass the cost on to consumers, the process was slow and often stagnated. Deregulation, has also sped this process up. In addition, green energy developments have seen new growth, in that now, they are viable options that can actually be pursued.
Some caveats
With this glowing report as presented by the study, there are nonetheless still improvements to be made. Most especially, the study found that the Electricity Reliability Council of Texas (ERCOT) needs to improve its management during peak demand, and improve technology related to “smart meters” whereby demand and usage could be lowered without having to build new power plants.
Conclusion
Texas electricity deregulation has worked for Texans and it can work for you as well. Exercise your Power To Choose and select a Texas power company that is right for you and your electric bill.
