We have updated the Texas Electric blog with many Texas counties. Soon you will be able to find all Texas counties listed, along with information on electricity companies in that Texas county. We are about half way done with the county listings. Just search in the box to the upper right of your screen to see if your county is listed, or look for page listing on the right of the screen for Texas electric companies by county.

You can now choose Texas electricity, natural gas and other Texas energy companies by zip code. Our handy zip code list on each of our city pages, to the right of the blog, allows you to find the lowest electricity rates, the cheapest natural gas, and other good deals from Texas power companies. Choose and compare Texas electricity rates for zip codes in your city. See our comparison chart and related links throughout the blog for more details. You can start by picking a city to the right and locating your zip code. Although we do not have a search feature in the blog, the Texas electricity and  Texas natural gas companies on a given page are appropriate to the Texas zip codes listed.

Good news for Texas natural gas consumers. Texas deregulated electricity service in phases starting in 2002, allowing providers to buy and sell power over the existing utilities’ wires, as a way to increase competition on pricing and service. As we discussed in our last post, this includes natural gas utilities, giving Texas customers a chance to compare electricity and natural gas finding the lowest rate possible.

In 1995, Texas natural gas and electricity deregulation began in Texas. In 1996 deregulation began in New York. In 2002 customers began to transfer to retail electric providers that they chose. Today, the Texas natural gas and electricity market is fully open to competitive pricing by all market participants. The market consists of power generators, energy delivery companies, retail electric providers and an independent grid operator. The independent grid operator in Texas is called Energy Reliability Council of Texas,(ERCOT). ERCOT oversees all aspects of the Texas power grid. The open marketplace promoted competition and gave retail electric providers and Texas natural gas providers the power to purchase electricity and gas in bulk. This purchasing power meant that the electricity could now be sold to customers at reduced rates. The customers of the new providers began to get better customer service as well. Deregulation in New York was similar to that in Texas. Customers in Texas and New York are now enjoying a savings on there electric and gas bills. Deregulation of electric service is now happening in other states as well. There are about 18 other states at some level of deregulation at this time. In this healthy, competitive environment there is more likelihood of attracting investors who will fund new power plants and alternative energy sources.

Another Texas natural gas company joins the Texas market. Infinite Energy has taken its model for buying & selling natural gas to Texas’ deregulated electricity market, a move that could double or triple the private Gainesville company’s sales in five years, President Darin Cook says. This allows Texas natural gas and electricity customers to compare gas rates and electric rates for the cheapest electric and gas prices.

Infinite Energy became a retail electric provider Nov. 1 for the Oncor power company’s service territory centered in Dallas/Forth Worth, one of four electric regions in the state, with plans to expand to the other regions. The company landed its first commercial customer Wednesday, Cook said. To fully explore lower Texas natural gas prices and lower electricity rates, follow the links throughout our site, or reference our comparison chart!

Texas Power
Texas Power is a retail electricity provider (REP) serving all deregulated electricity areas in Texas. They are located in Arlington, Texas. Texas Power bills customers for electric service provided by the power
distribution companies. They pride themselves on a simplistic approach to electricity service and their deep
Texas roots.

Texas Power services roughly 20,000 residential electricity customers. Texas Power also serves small, medium and large commercial accounts. They are branching out from their initial strategy and instituting fixed rate for 3,6 and 12 month terms. In 2002, Texas deregulated the electricity market and in 2003, Texas Power joined in. They now compete against other energy companies like Glacial Energy, TXU, Bounce Energy, Reliant Energy, MXenergy, Direct Energy, Stream Energy, Gexa Energy, Cirro Energy. At this time, Texas Power offers month to month price plans as well as 3, 6 and 12 month fixed price plans.

 
Texas Genco

Texas Genco is a major power generation firm, active in the deregulated Texas electricity market and owns several major power plants in the Houston area that serve area power needs.

Seeking opportunities arising out of the deregulation of the electricity industry in Texas, in late 2004 four private equity firms—the Texas Pacific Group, the Blackstone Group, Kohlberg Kravis Roberts, and Hellman & Friedman of San Francisco—combined forces to purchase Texas Genco from the transmission & distribution provider utility Centerpoint Energy for Houston.

This coalition of firms acquired Texas Genco—which was the second largest operator of power generation facilities in the state—for a price of approximately $1.9 billion and using just $900 million in cash.

In late 2005, these private equity firms announced the sale of Texas Genco to NRG Energy of Princeton, N.J., for a price of roughly $5.9 billion. The investors achieved a gain of almost $5 billion over the space of an investment holding period of less than 18 months, a return that will mark one of the most lucrative private equity investments in recent years.

Direct Energy
Direct Energy is a retailer of energy and energy services. The company was founded in 1985 or 1986. With over six million customers in Canada and the United States, it is the largest energy and home services retailer in North America. The current President and Chief Executive Officer of the company is Chris Weston. Direct Energy is a subsidiary of UK-based Centrica plc, an integrated energy company.
Direct Energy was founded in Toronto in 1986, as a competitive energy retailer. In 2000, the company was acquired by Centrica, the UK-based parent of British energy retailer British Gas.

From 2000 onwards, Direct Energy grew rapidly through acquisition. These acquisitions included Energy America (2000)[4], Enbridge Home Services (2002)[5], AEP’s Texas retail operatings (Central Power and Light and West Texas Utility), the regulated retail operations of ATCO Gas and ATCO Electric in Alberta, Entergy Solutions Ltd.’s ERCOT customer base and Strategic Energy (2008).

In the area of energy services, Direct Energy acquired Luced Heating Contractors, BASE Controls Ltd., MABE Canada Inc.’s in-home service repair division, and the Residential Services Group.

Direct Energy acquired a number of upstream assets, including gas reserves and power generation facilities. These include: Quintana Minerals Resources, Bastrop Energy Center, Frontera Energy Center, Paris Energy Center, and Rockyview Energy Inc.. Direct Energy has entered into long-term power purchase agreements for 813 MW of electricity from four wind farms in Texas.

Direct Energy owns and operates approximately 4,550 natural gas wells in Alberta, most recently acquiring natural gas assets from Suncor Energy.

Chris Weston became President & CEO of Direct Energy on July 1, 2009 following the retirement of Deryk King.

Products and services
Direct Energy’s U.S. operations span 46 states and the District of Columbia including: Texas, Ohio, Michigan, Illinois, Pennsylvania, California, Connecticut, Maryland, Rhode Island, Maine, New York, New Jersey, Delaware, Massachusetts, Florida, North Carolina, Kentucky, Indiana, Alabama and Virginia. In Canada, Direct Energy has operations in Ontario, Alberta, British Columbia, Manitoba, Quebec, Saskatchewan, Nova Scotia, Prince Edward Island, New Brunswick and Newfoundland.

For residential customers and small business, Direct Energy offers fixed price electricity and gas plans, as an alternative to the local utility. Through its services division, Direct Energy installs and services heating, ventilating and air conditioning equipment. It also can perform energy retrofits and other energy management projects at larger facilities. Direct Energy’s Home and Business Services division employs over 1,400 technicians providing residential customers with heating, ventilation and air conditioner (HVAC), plumbing, home improvements, water heater and electrical appliance services.

Direct Energy is a regulated gas and electricity provider in Alberta, operating under the Direct Energy Regulated Services brand. It also offers deregulated service in the Province, operating as Direct Energy.

In South Texas, Direct Energy operates as CPL Retail Energy and CPL Business.

In West Texas, Direct Energy operates as WTU Retail Energy and WTU Business. Competitors include TXU, Bounce Energy, First Texas Energy Corporation, Texas Power, and Reliant Energy.

Controversies
Direct Energy was fined C$157,500 in 2003 after investigators discovered 21 forged contracts trapping customers into long-term energy deals.[7] According to Paul Massara, then the president of the company, the forgeries took place between June 2001 and April 2002. Both Direct Energy and a company it acquired, Energy America were charged with employing unethical business practices, with Energy America being fined over $500,000 in penalties for enrolling customers without permission and using deceptive sales pitches. The companies were found to have used unethical business practices in Michigan, Georgia, Texas, Ontario and Manitoba. [8][9] The Ontario government has since passed a bill that would require energy retailers to follow up on each contract sold to ensure the customer had willingly made the purchase.[10]

During the investigations, the company frustrated investigators by withholding and concealing evidence, failing to respond to complaints, failing to respond to subpoenas for court appearances and generally ignoring demands to comply with the investigation. The U.S. branch of the company was taken to court by a customer in 2002. The judge in the case removed himself after being solicited for a contract by Energy America, citing a concern that he was now a potential witness in the case. Before the hearing could be re-scheduled, the complaintant settled out of court with the company on the condition that he no longer discuss the case publicly.[11]

Deregulation position
The previous CEO of Direct Energy Deryk King has given several speeches stating the need for deregulation of the energy market and the need for consumers to pay the actual price for energy rather than what he considers its current artificially low position. King states that he believes consumers will not reduce consumption or use energy-efficient tchnology until they have to pay the true cost of electricity.[12]

 Simple Power
Simple Power is a privately owned Retail Electric Provider (REP) based in Austin, Texas. Simple Power services both residential and commercial customers in the deregulated Texas electricity market.

Since the deregulation of the Texas electricity market, REP’s like Simple Power are able to buy electricity at a wholesale rate and sell it at unrestricted prices. Simple Power’s goal is to simplify the current and expected rise in complexity of plans, signup, rates and fees for all consumers in Texas.

Switching from one provider to another does not require changing power lines, but is the same as choosing a different service any other industry. Typically the customer would only see changes in the billing company and rates.

Gexa Energy
Gexa Energy, headquartered in Houston, Texas, is a retail electricity provider which sells electricity service to residential and commercial customers in all deregulated markets in Texas.

The company is a subsidiary of NextEra Energy Resources. Based in Juno Beach, Florida, NextEra Energy Resources is a subsidiary of NextEra Energy, Inc. (NYSE: NEE).

Gexa Energy entered the Texas deregulated electricity market in 2002. The company services residential and commercial customers in Houston, Dallas, Fort Worth, Corpus Christi, Midland, Harlingen, Odessa, Lubbock, Waco and all Texas markets where electricity service has been deregulated.

Gexa Energy also sells electricity service to commercial customers in Connecticut, Illinois, Maine, Maryland, Massachusetts, Rhode Island and Washington DC.

Gexa Energy customers can earn Continental Airlines OnePass miles or American Airlines AAdvantage miles when they sign up for service. The company also awards frequent flier miles for every dollar customers spend on their Gexa Energy charges.

 History
The Public Utility Commission of Texas approved Gexa Energy as a retail electric provider in 2001.

Gexa Energy was acquired by NextEra Energy, Inc. formerly FPL Group, in 2005.

Gexa Energy operates under PUCT Certificate #10027.

 Cirro Energy
Cirro Energy is a retail electric provider (REP) based in Richardson, Texas, that delivers electrical service and customer service to tens of thousands of power customers throughout the Electric Reliability Council of Texas (ERCOT) distribution grid within the deregulated Texas electricity market.

Cirro Energy is led by Timothy W. Rogers (Chief Executive Officer), who manages its corporate finance function and oversees the company’s day-to-day operations. Prior to co-founding Cirro, Rogers co-founded and was a board member of CapRock Communications, a regional communications provider.

Stream Energy
Stream Energy is a retail electricity and natural gas firm active in the Texas and Georgia deregulated energy markets and headquartered within the InfoMart building in Dallas. Stream Energy focuses primarily upon recruiting (on a network marketing basis) and servicing residential customers located within Texas and Georgia jurisdictions that permit consumers the ability to choose their own electricity or gas providers.

Stream Energy Type Privately held
Industry Retail electricity provision
Founded 2004
Headquarters Dallas, Texas
Key people Rob Snyder
Chairman
Lisa Holliday
Chief Financial Officer
John Littlejohn
Chief Operations Officer
Pierre Koshakji
Senior Managing Director
Eric Hendrick
Managing Director
Matt McGaughey
Managing Director
Doug Witt
Managing Director

History
Stream Gas & Electric Ltd. (d/b/a Stream Energy) was founded in August 2004 by executives from Excel Communications in response to the deregulation of the Texas electricity market. Stream Energy was licensed as a Retail Electrical Provider by the Public Utilities Commission of Texas on 21 January 2005 (license number 10104) and formally began operations through the initial enrollment of Texas electricity customers on 7 March 2005. Stream Energy has since expanded its reach and during May 2008 was certificated by the Public Service Commission of Georgia to providing natural gas service to Georgia consumers.

Competitive Landscape
Since the onset of Texas electricity deregulation in 2002, the regional ex-utility companies active in the Texas power market — i.e., TXU Energy in north Texas, Reliant Energy in southeast Texas and Direct Energy in coastal and west Texas—continue to retain roughly 60% of their pre-deregulation former monopoly residential bases. Stream Energy competes for customers throughout Texas against these incumbent power retailers as well as other emerging electricity providers such as Gexa Energy, Bounce Energy, Green Mountain Energy, First Texas Energy Corporation, Texas Power and Cirro Energy.

The Ignite Organization
Stream Energy created a separately-branded marketing arm, Ignite, designed to implement a multi-level marketing strategy. Substantively employing the model first pioneered within the consumer services sector by Excel Telecommunications, Ignite associates earn fees in respect of both customers and associates recruited during their first month of tenure with Ignite but derive their primary source of compensation from fixed residual payments upon the paid bills of electricity customers within their respective network marketing downlines.

Local meetings known as “Business Presentations” held to introduce invited parties to the Ignite concept are conducted throughout Texas at more than 80 venues on a weekly basis. Independent Associates also maintain Ignite internet-based “homesites” that serve as informational web forums for the education of recruits.

Since its first promotional event held on 27 January 2005, Stream Energy has attracted through this Ignite organization more than 160,000 independent associates which, in turn, focus on recruiting principally individuals from within their “warm market” (family, friends and acquaintances) as prospective electricity customers and future sales agents.

Awards and recognition
Stream Energy has been nominated and given award recognition by several highly respected business organizations and universities:

Stream Energy Executives Named Finalists for American Business Awards – 2010
Platts Global Energy Awards / Finalist in Two Categories – 2009
Inc. 500 List / Stream Energy Breaks Top 200 In First Year Of Eligibility – 2009
Direct Selling Association Rising Star Award Finalist – 2009
Platts Global Energy Rising Star Award Finalist – 2007, 2008
SMU Cox School of Business Dallas 100 Entrepreneur Award Winner – 2008
Ernst & Young Regional Entrepreneur of the Year Award Winner – 2008
Genesys Customer Innovations Award Winner – 2008
Greater Dallas Chamber of Commerce Momentum Award Winner – 2007
Media coverage
Stream Energy and its marketing arm Ignite, Inc. are featured in several newspaper articles, magazine write ups and television reports.

Stream Energy Chairman Rob Snyder Featured in the Dallas Morning News – March 2010
Stream Energy Chairman Rob Snyder Featured in Smart Business Magazine – February 2010
Dallas Business Journal / Special Feature “Top Private Companies” – September 2009
Direct Selling News / Industry News Article Participant – May 2009
Direct Selling News / Industry Spotlight Article Participant – April 2009
WFAA ABC Channel 8 (Dallas) / Daybreak Morning Show – March 2009
Direct Selling News / Company Spotlight Article – March 2009
Direct Selling News / Billion Dollar Club Article – February 2009
Dallas Business Journal / Special Feature “Dallas 100” – December 2008
Direct Selling News / Cover Story Participant – August 2008
Direct Selling News / Top Desk Article – July 2008
Dallas Business Journal / Cover Story – January 2008
Direct Selling News / Young Company Focus – February 2007
D Magazine – March 2006
WFAA ABC Channel 8 (Dallas) – February 2006

Ambit Energy
Ambit Energy is an American energy company which resells electricity and natural gas, primarily to residential consumers in Texas, New York and Illinois./In 2010, the company was ranked #1 in Inc. magazine’s “Inc. 500″ list, after achieving 3 year growth of 20,369.4%. The company’s business model relies on a multi level marketing scheme, currently involving over 70,000 individual agents, who recruit new customers.

 
Green Mountain Energy

Green Mountain Energy is a United States company that offers clean electricity products, and carbon offsets to residential and commercial customers.
History
Green Mountain Energy Company began in Vermont in August 1997 as an offshoot of Green Mountain Power to take advantage of electricity deregulation around the country. The company moved headquarters to its current location in Austin, Texas in September 2000. Competitors of Green Mountain include Reliant Energy, Texas Power, TXU, Gexa Energy, and Direct Energy. It was reported in September, 2010 that the sale of Green Mountain Energy to NRG was pending regulatory approval.

Company Structure
In Texas, Green Mountain directly serves residential electricity customers who live in a deregulated utility service territory. The company upholds that it is the only retail electric provider in Texas dedicated to cleaner electricity.

Green Mountain also partners with utilities in regulated markets in the U.S., such as Portland General Electric (PGE) in Oregon, to offer renewable energy products to their customers. Additionally, Green Mountain participates in multi-supplier utility partnering programs in New York and New Jersey.

Beyond their residential service, Green Mountain has a commercial and industrial division devoted to providing clean electricity to businesses and organizations. This sector began in December 2002, and offers corporations the opportunity to decrease their CO2 emissions by purchasing renewable energy.

BeGreen is a division of Green Mountain that offers carbon offset products to individuals and businesses nationwide. The BeGreen website includes an online calculator to help individuals determine their carbon footprint and offers carbon offsets to neutralize it.

CenterPoint Energy

CenterPoint Energy (NYSE: CNP) is a Fortune 500 electric and natural gas utility serving several markets in the U.S. states of Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. It was formerly known as Reliant Energy (from which it is now separated), NorAm Energy, Houston Industries, and HL&P. The company is headquartered in the CenterPoint Energy Tower at 1111 Louisiana Street in Downtown Houston.[1][2] Some of its notable subscribers include Retail Electric Providers (REPs), such as Reliant Energy, Dynowatt, Texas Power, Bounce Energy, MXenergy, Direct Energy, Stream Energy, First Texas Energy Corporation, Gexa Energy and Cirro Energy.
History
This section does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2009)

Until December 15, 2004, CenterPoint Energy and its predecessors operated in its various markets under these names; they were used separately prior to Reliant Energy, and later in conjunction with the Reliant Energy and CenterPoint Energy names:

Minnegasco (Natural gas throughout parts of Minnesota)
Houston Lighting and Power (or HL&P) Houston-Galveston electric provider Entex (Natural gas throughout South and East Texas, Southern Louisiana and Mississippi) Arkla (Natural gas throughout Northern Louisiana, Oklahoma and Arkansas) In late 2004, four private equity firms—the Texas Pacific Group, the Blackstone Group, Kohlberg Kravis Roberts, and Hellman & Friedman—combined forces to purchase Texas Genco from Centerpoint. Later in 2006, Texas Genco was sold to NRG Energy of Princeton, N.J.
A CenterPoint Energy facility in Downtown Houston.In September 2008, CenterPoint Energy suffered great disruption of service in the Greater Houston Area, wiping out 2.1 million of CenterPoint Energy’s 2.26 million clients’ electricity. This was the largest power outage in the company’s 130 year history, as well as the largest in the state’s history.

Later in March 2009, the company’s five-year smart meter deployment began, delivering enhanced smart meter functionality to Retail Electric Providers (REPs).

Amigo Energy

Amigo Energy is a privately owned, full-service Retail Electricity Provider (REP) to residential and commercial customers in Texas.
History
Amigo (Spanish for friend) is a privately owned, full-service Retail Electricity Provider (REP) to residential and commercial customers in Texas. In 2007, Amigo became a wholly owned subsidiary of Fulcrum Power Services.

Amigo services customers throughout almost all deregulated transmission areas in Texas.

Partnership with the Houston Dynamo
The Houston Dynamo reached a four-year sponsorship agreement with Amigo Energy on August 15, 2007, making the Houston-based retail electricity provider the largest sponsor in the franchise’s history.[1] As part of the advertising campaign, Amigo Energy becomes the official jersey sponsor of the Dynamo. The Houston franchise is the sixth league team to sign jersey sponsors, along with Red Bull New York, Los Angeles, Chivas USA, Real Salt Lake and Toronto FC.

The Amigo Energy logo will appear on all team jerseys, along with other on-field gear, effective Sunday, August 19. Amigo Energy also becomes the official home and business retail energy provider of the Dynamo. As part of the deal, Amigo Energy will establish a focused marketing strategy that uses the Dynamo in co-branded advertising, customer retention, and new customer acquisition programs.[2]

The new replica Dynamo jersey with the Amigo Energy logo is being produced by Adidas.

 TXU
Energy Future Holdings Corporation is an electric utility company headquartered in Energy Plaza in Downtown Dallas, Texas, United States. The company was known as TXU until its $45 billion leveraged buyout by Kohlberg Kravis Roberts, Texas Pacific Group and Goldman Sachs. That purchase was the largest leveraged buyout in history.

History
The company traces its history to the beginnings of electric service in northern Texas. Predecessor companies include Dallas Power & Light (DP&L), which served the city of Dallas; Texas Electric Service Company (TESCO), which served areas surrounding Fort Worth; and Texas Power and Light (TP&L), which served other areas of northern and west-central Texas.

Texas Utilities was formed in 1945 as a publicly-owned holding company that owned DP&L, TP&L and TESCO. The three operating companies continued to operate separately until 1984, when they were merged into one operating company, called TU Electric (”TU” meaning “Texas Utilities”), in 1984. Following acquisitions of The Energy Group plc in 1998 in the United Kingdom and a power generator in Australia, Texas Utilities became TXU.

In 1996, TXU merged with the parent company of Lone Star Gas, allowing TXU to become the largest provider of electricity and natural gas in the state of Texas. In 2002, the state of Texas deregulated the Texas electric market, and TXU lost its monopoly on retail electric sales in northern Texas; TXU now competes statewide against other energy companies like Dynowatt, Texas Power, Reliant Energy, Bounce Energy, Direct Energy, Stream Energy, Gexa Energy, Green Mountain Energy, Cirro Energy and Commerce Energy. TXU divested itself of its European holdings in late 2002 mainly due to the collapse of its UK holdings and then its Australian holdings in 2004. Also in October 2004 TXU sold its natural gas properties to Atmos Energy. TXU’s former Australian assets were sold to Singapore Power and then split up, with Singapore Power retaining the distribution businesses (electricity and natural gas distribution networks) in the state of Victoria, while divesting the retail and generation businesses to Hong-Kong-based CLP Group, trading as TRUenergy. On May 18, 2004  and Capgemini then entered a limited partnership to form Capgemini Energy Limited Partnership, a new company that will initially provide business process services and information technology solutions to TXU.

Private equity firms KKR, TPG Capital and Goldman Sachs purchased TXU in 2007; the sale became final on October 10, 2007. As part of the buyout, the electric distribution part of the company is now called Oncor Electric Delivery, the electric generation business is called Luminant, leaving TXU Energy as solely a retail provider of electricity without any electrical distribution or production assets. Luminant owns and operates the Comanche Peak nuclear power plant
 This Texas Electricity Information is from Wikipedia under the Creative Commons Attribution-ShareAlike 3.0 Unported License

Electricity deregulation in Texas was the result of the coming into force of Texas Senate Bill 7 on January 1, 2002. According to the law, deregulation is to be phased in over several years.

As a result, most Texas power customers (those served by a company not owned by a municipality or a utility cooperative) can choose their electricity service from a variety of “Retail Electric Providers” (REPs) which includes the incumbent utility (usually a subsidiary thereof). The incumbent utility in the area still owns and maintains the local power lines (and is the company to call in the event of a power outage) and is not subject to deregulation. Customers served by cooperatives or municipal utilities can choose an alternate REP only if the utility has “opted in” to deregulation; to date, only the area served by the Nueces Electric Cooperative has chosen to opt in.

Since 2002, approximately 85% of commercial and industrial customers in Texas had switched power providers at least once. Approximately 40% of residential customers in deregulated areas of the state have switched from the former incumbent provider to a competitive REP. Notable Retail Electric Providers (REPs) include: Glacial Energy, Kinetic Energy, Reliant Energy, Dynowatt, Texas Power, Bounce Energy, MXenergy, Direct Energy, Stream Energy, First Texas Energy Corporation, Gexa Energy, Cirro Energy and StarTex Power.

Energy prices in Texas have increased substantially since deregulation.

The state of Texas is the largest electricity market in the United States;
Texas also ranks as the 11th largest worldwide market, falling between Great Britain and Spain in terms of annual consumption.

The law designated the Electric Reliability Council of Texas (ERCOT) to be the authority to oversee grid reliability and operations so as to ensure no particular buyer or seller would gain an unfair advantage in the marketplace.

“Aggregators” are legal entities that join together two or more customers for the purpose of purchasing electricity at reduced rates. Although there are almost 200 aggregators registered with the Public Utility Commission, perhaps only 25 or so are still active in terms of
acquiring and managing customers.

The “price to beat”
Included within SB7 was a regulated rate concept governing the pricing behavior of the ex-utility providers known as the “Price To Beat” or PTB.

In typical economic theory, prices are optimally determined in a fair
and transparent market, and not by a political or academic body. In Texas’s deregulation, one concern with setting prices in the market right away was that incumbent electricity providers would undercut the prices of new entrants, preventing enough competition and creating a continuation of the existing monopoly of providers. Thus, the SB7 bill introduced a phase-in period during which a price floor would be
established (for incumbent electricity companies) to prevent this predatory practice from occurring, allowing new market entrants to become established. New market entrants could charge a price below the Price to Beat, but incumbents could not. This period was
to last from 2002 to January 1, 2007

How is the Price to Beat established?

In order to incentivize participation in the Texas market, the
Price to Beat would have to be high enough to allow for a modest profit by new entrants. Thus, it had to be above the cost of inputs such as natural gas and coal. For example, a PTB price that is fixed at the actual wholesale procurement price of electricity does not give potential entrants margin to compete against incumbent utilities. Second, the
Price to Beat would have to be reasonably low, to enable as many customers as possible to continue to enjoy electricity during the transition period.

Competition and entry of new firms – What mechanism funds electricity generation?

There is often confusion about the relationship between deregulation, competition, profits, and how pricing is decided. Electric utilities were originally created because of the concern that there would be little competition among electricity providers, and thus there would be monopoly pricing. In the years since that era, some legislators in Texas came to believe that competition could operate where previously it was thought that it could not. For example, in 1999 Governor George W. Bush stated that, “competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices.”[4] This belief led the legislators to deregulate the electricity market in Texas.

The original fear was that because of the large capital requirements for things like power plants, only one company would typically have enough capital to create and own the plants; thus, with no choices of other providers, consumers would be stuck with monopoly prices. In today’s world, the opposite is true: there is plentiful capital to be invested, and often numerous plants are proposed (by competing companies) to fulfill the same or similar needs, even to prepare to meet future needs. The existence of efficient capital (debt and equity) markets enables new entrants to raise money and begin construction on power plants where a future need has been identified.

Energy industry representatives argue that deregulation will correct a bottleneck in electricity supply and point out the 2003 North America blackout and the California electricity crisis as examples of problems that, they argue, could not arise in a mature deregulated electricity market.

What is notable about profitable versus rate-controlled utilities?

If deregulation leads to profitable rates, the building of new capacity, and the eventual creation of buffer capacity that would make blackouts unlikely, why couldn’t society achieve this without having to pay profits to electricity firms?

If a provider receives its funding from private sources, it has to make a reasonable return (profit), or that funding will go fund something else. If a provider that receives private funding cannot charge market rates that reflect its costs, it may not be able to pay the needed return, and its funding will dry up. Conversely, if a utility instead agrees to charge below-market rates, it either a) cannot compete with a utility that can afford to build better plants to satisfy demand, or b) it must raise money via taxes rather than from the market to invest in new plants.

Previous utility economic theory posed a problem with unregulated rates: there will not be enough competition to keep rates reasonable, because of the capital costs. Modern economists generally agree on the presence of competition where it was previously considered impossible.

Deregulation has enabled entry of new firms.

Since 2002, other companies such as Constellation Energy and FPL Group have entered the ERCOT market for the purpose of gaining market share.

More than 60 startup firms have been formed specifically for the Texas electricity market, split almost equally among commercial-usage focused firms and residential-usage firms.

(There was more detail here in previous versions of this article; I don’t understand why the factual information was deleted. One very informative paragraph discussed the rise of “aggregators,” which are consumers’ advocates in negotiating low rates on the market.)

What about the problem of recent skyrocketing prices?

Many have focused on the recent rise in Texas electricity prices as a reason to reject deregulation; after all, the claim was that deregulation would help consumers and lower prices. What is less commonly considered is that deregulation, by enabling new entrants and competition, probably has restrained prices better than the alternative.

For example, according to a commentary website, while prices to customers increased 43% from 2002 to 2004, the costs of inputs (e.g. natural gas) rose faster, by 63%, showing that not all increases have been borne by consumers. In economics circles, a lot of discussion revolves around how prices are passed on down a value chain, from producers to intermediaries to consumers. To economists who study price elasticity and competition, the above statistic implies that competition is preventing producers from passing on the full costs of the increases in their inputs.

Additionally, by enticing the construction of massive new capacity (if this is permitted politically), it is clear that Texas’s electricity markets will experience more rigorous competition on price.

A note on why natural gas prices are used instead of coal prices

When commentators complain that Texas electricity companies are unfairly basing their prices on natural gas prices, this is because there are not enough coal (cheaper) power plants to satisfy demand. To clear the market properly (that is, satisfy everyone), the price must be set at the marginal price, or the price of bringing online the temporary supply of the expensive natural gas-powered plants. See example below:

In basic economics the “clearing” price of any commodity is determined by the marginal price, or the price of the last item to be sold if they are all to be sold. Example: Suppose your sandwich shop has enough cheap lettuce for 5 sandwiches (cost: $1 apiece) and enough expensive lettuce (held on reserve, just in case) for 5 sandwiches (cost: $3 apiece). The rest of each sandwich costs $3, and typically you only sell the cheap lettuce sandwiches for $5, a $1 profit. Now 10 customers come in the door at the same time, a new record. You have not written the price of a sandwich yet on the board. What price should you set?

Your sandwich shop will go out of business setting it at $5, because it will have to make no profit on the sandwiches, leaving nothing left over for maintaining or improving the shop (a capital expense – need excess capital for this). If it tries to sell some at $5 and some at $7, the $7 customers will be angry – because the expensive, reserve lettuce is no different from them, no added value. And the $7 customers look unfairly at the $5 customers. (This is analogous to trying to sell some customers expensive electricity generated by the natural gas turbines and selling to the other customers cheaper electricity – electricity is electricity to the customer.)

The sandwich shop must price all the sandwiches at the marginal price that enables him to make a profit on his expensive sandwiches, by setting the price at $7 (a profit of $1 with the expensive lettuce).

For the same reason, that expensive natural gas power plants are necessary to supply the growing demand, current Texas electric companies must set their prices at the price dictated by natural gas production, even though some of their electricity comes from cheaper coal plants.

What will basing the price on natural gas prices do in the longer term?

By selling coal-generated power at the higher price of natural gas-generated power, Texas electric companies are reaping profits – but not for long. Everyone in the system knows about this profit, and profit invites imitators to build more coal plants to try to take some of the profit. After enough coal plants are built, suddenly demand can be entirely met with coal plants – and the marginal price is no longer set by the natural gas plants. Thus, the profit incentive of the market pricing causes three things to happen:

The profit causes investment (not because profit is always invested, but because others want to obtain the profit available at the market-clearing price) The new investment causes an increase in capacity (which is what customers are communicating when they are paying more for the expensive electricity) The increase in capacity solves two social problems simultaneously: it lowers prices again, and it enables more people to enjoy inexpensive electricity than could enjoy it prior to investment – The type of deregulation that has been passed in Texas allows the above socially optimal cycle to occur, for the reasons mentioned earlier.  As mentioned above, we are already seeing signs confirming that such investment and competition is already occurring in Texas.

Results:
One desired result of the competition encouraged by deregulation is lower electricity rates. Since electrical deregulation was implemented in Texas in 2002, the residential rate for electricity has increased seven times, with the 2006 Price To Beat at around 15 cents per kilowatt (as of July 26, 2006, www.powertochoose.org). However, according to a commentary website, while prices to customers increased 43% from 2002 to 2004, the costs of inputs (e.g. natural gas) rose faster, by 63%, showing that not all increases have been borne by consumers [7]. (See Competition and entry of new firms above for discussion on the relationship between retail prices, inputs, and investment.)

The deregulation in Texas permitted a few regions to retain regulated rates, such as Austin. In these areas, the electricity rate has stayed closer to the average American rate of about 10 cents per kilowatt-hour. For those residents that have access to competitors (often more than a dozen), prices are only a little lower than the Price To Beat; for example, the lowest cost provider in North-Central Texas charges 12.9 cents per kilowatt (as of July 26, 2006, www.powertochoose.org).

However, the Price to Beat seems to have accomplished its goal of attracting competitors to the market during the period through January 1, 2007. It has allowed competitors to enter the market without allowing the incumbents to undercut them in price. The less-regulated providers undercut the Price to Beat by only a small margin given that they must balance lower prices (to attract customers and build market share) with higher prices (needed to reinvest in new power plants).

Using the Austin rate of 10 cents per kilowatt as a benchmark of still-regulated pricing, Texans in deregulated markets pay a premium of 29% above the regulated rate. Some have regarded the unmet expectation of lower rates promised by deregulation as a failure. Many states are now putting their plan to deregulate on hold because lower rates have yet to be achieved in any of the deregulated states. However, there are investment tradeoffs to these dilemmas (see Competition and entry of new firms above for a discussion of investment tradeoffs).

In environmental impact, results are mixed. With the ability to invest profits to satisfy further energy demand, producers like TXU are proposing eleven new coal-fired powerplants. Coal powerplants are more efficient and cheaper than natural gas-fired powerplants but produce more pollution. When the private equity firms Kohlberg Kravis Roberts and the Texas Pacific Group announced the wanted to buy TXU, they called off plans for eight of the coal plants. TXU had invested more heavily in the other three. A few weeks later the buyers announced plans for two cleaner IGCC coal plants.

There are positive environmental impacts from retail price deregulation as well. The profitable and growing Texas electricity market has drawn considerable investment by wind-turbine companies. In July 2006, Texas surpassed California in wind energy production.

Another positive environmental impact is the effect of higher energy prices on consumer choices, similar to the US market trend toward more fuel-efficient cars. As electric bills have risen, residents are reducing their electrical usage by: using more moderate thermostat settings, installing insulation, installing solar screens, and other such activities. Texas utilities (such as Austin Energy) are also installing advanced electricity meters that may one day enable variable pricing based on the time of day. This would permit energy customers to save money by further tailoring their consumption based on whether it occurred during the peak demand period (high cost/high pollution) or the off-peak (night time).

The Texas summer is here and the heat is here as well! Don’t let it get you down though. Texas Electric Compare can save you money this summer by comparing electricity rates from the states leading electricity companies. Take a look at the chart below or visit the site sponsors to find the lowest TX electricity rate possible for your summer electric bill. We post Texas electricity rates from Reliant Electric, Green Mountain Energy, TXU Energy, Texpo Electric and other major TX power companies.

Thanks to Texas electric deregulation in 2002, electric customers in Texas now have a choice in their electricity service provider. The battle has been ongoing since ‘02, with more and more electric service providers jumping on board to provide power to TX residents. As the competition rises, electric rates keep getting lower. That is GREAT news for consumers

The new rules allow for greater competition among Texas electricity providers and allowed many electric services to offer more appealing rates. The Texas Electric monopolies are a thing of the past and you can now choose your rates and your TX electricity provider, seeking out the most affordable electric rates. Below is a list of electric rates from some of the major players in the Texas electricity market, including Reliant Electric, Green Mountain Energy, TXU Energy, Texpo Electric and other major TX power companies, along with electric the rates of Affordable Energy.

There is a new Texas retail electric provider making lower rates a reality for hundreds of thousands of Texas households. Affordable Energy has been providing retail electric service since 2005 and thousands of Texans apply for service daily. As a Texas retail electric provider, Affordable Energy keeps your budget in mind, with the lowest rates and the highest customer satisfaction. They provide Texas retail electric service through the same distribution channels as your current provider. Their electricity runs along the same lines and poles, so your retail electricity is as reliable as ever. The only thing you’ll notice is a lower rate each month. Affordable Energy is not the biggest Texas retail electric provider but they are quickly becoming the best. Take a look below at the 1 year retail electric rates and you’ll see why.

Rates from the above Texas retail electric providers are based on the Houston Electric Market. Your rates may be even lower. To compare Texas retail electric rates in your city, visit Dynastar Energy today and enter your service address. If you like what you see you can apply online and start getting a lower texas retail electric rate right away. Electric deregulation has made it possible for Texas retail electric providers to join the market and essentially level the playing field for retail electric service. You can start seeing lower bills each and every month when you make the switch.

Last week I received a knock on the door, twice. Two of the bigger Texas Electric companies came calling. Since I work for Affordable energy, I was curious to hear what they had to say. I let them in and we talked for a few minutes. Each wanted me to sign a long term agreement to lock in what they claimed were “low” Texas electric rates. 13.5 cents per KWh is not low in my vocabulary, and rates for both companies were about the same. “But your being locked in, this rate won’t rise for 3 years!” They seemed excited by this fact.

Just today I opened an envelope from Direct Energy, a newer and, allegedly, more competitive electric supplier in Texas. They offered me $50 to switch to their “lower rate plan.” I had to hurry though, and call them by the end of August, or the offer would no longer be valid. My question is “what offer?” They never told me how much (or how little) I would pay. What was this new “low rate” they alluded to? Sure, they can afford to give me $50 now, because they intend to pocket the change from my electric bill for the next 2 or 3 years.

My suggestion to everyone who reads this is to sign up for a 1 year electric agreement with Affordable Energy. You can see by the rates above that they are the most competitive of the major Texas electricity companies. You can sign for 2 or 3 years and still save, sure, but try them for a year. You’ll see that the savings is DEFINITELY for real. The customer service is great, and the electric service is just as reliable as that that you receive currently. In fact, if you are in Houston, electricity is provided by Centerpoint energy, no matter what electric company you choose. They are the local electric distributors and are in charge of the “lines and poles” you receive service from. The only thing you’ll notice is lower rates! Depending what other Texas electric market you’re in, you may get power from OnCor, AEP, or TNMP (Texas-New Mexico Power.) Regardless, your electricity is the same, and is ussered into your home along the same wires and poles. The above rates are for the Houston Electric market, rates in your Texas town may be as low as 11 cents! Visit Dynastar Energy today to get a quote in your area.

With all the Government bailouts, you hear a lot these days about a large company being “to big to fail.”Well back in 2002, the Texas legislature decided that the Texas electric companies at the time were simply “too big.” They represented a monopoly, and stifled free and open commerce. They implemented energy deregulation, which essentially opened the market to independent electricity provider across Texas. Since that time, a number of companies have made their electric services available throughout Texas. These new Texas electric providers offer lower rates, incentives, and other reasons to make the switch.

One of the most competitive is Affordable Energy. With great customer service, reliable electric service, and low deposits, they are fast becoming the Below you will see 1 year rates from Affordable, compared to the major players in the Texas Electricity market:

The above prices are for the Houston Electric market. Rates for Affordable Energy in your area may be even lower! Before you make the switch though, ask yourself a few questions:

1. Am I satisfied with my current Electric provider?

2. Am I under contract with them?

3. Is a better rate available, without having to change companies?

In most cases, Texas electric customer ARE NOT satisfied, they may not be under contract, and the rates the “big electric providers offer is far higher than some of the newcomers. These newcomers provide the same electricity, running across the same “wires and poles” as you current service, but it’s typically much more affordable. To check rates in your area, visit Dynastar Energy today.

The Texas Electricity market has changed. You are no longer subject to the electric monopolies of the past. Texas electric deregulation has leveled the playing field for electric providers across Texas. You now have the power to choose – and the power to save. Visit the city of your choice from the “Pages” columns on the right. You’ll find rates to compare and links to help you make the quick switch to a cheaper Texas electric bill!

The following Texas electric rates are based on a 12 month agreement, and are per KWh. Rates vary, based on your Texas location.

Affordable energy offers the lowest electric rates in the above example. But what does it mean to go with a lesser known Texas electric company? All it means to you is cheaper electric rates! Your electricity service will remain just as reliable. All Texas electricity runs along the same power lines and through the same Texas electric distribution channels. You just get a bill rom another provider. Start saving on your Texas Electric bill tomorrow by joining Dynastar Energy today.