AUSTIN – Residential customers who remain with an affiliate of the electric utility historically serving their area will pay about $927 million less for electricity this year than they did in 2001, according a report issued by the Public Utility Commission of Texas (PUC).
In its August 2002 Report Card on Retail Competition, the PUC determined that customers paying “Price to Beat” rates to incumbent utilities have saved $690 million compared to rates in effect at the end of last year. The Price to Beat is the rate set by the PUC that the Affiliate Retail Electric Provider must charge for electric service.
“This report is further evidence that competition for electric service is working for Texas,” said PUC Chairman Rebecca Klein. “People are paying less for electricity in a competitive marketplace – even without switching providers.”
Roughly $197 million of the savings through August came from a 6 percent reduction in electric rates mandated by legislation that opened most of the state’s retail electric market to competition. An additional $493 million in savings through August resulted from lower fuel costs and the expiration of fuel surcharges.
The Report Card projects that residential customers paying Price to Beat rates to incumbent utilities will save an additional $237 million from September through December of this year. That figure includes higher fuel costs charged by incumbent utilities that the PUC approved in September.
Customers could save even more money if they took advantage of lower offers from Retail Electric Providers (REPs) competing with incumbent utilities, the report notes.
For example, if 5 percent of residential customers currently paying Price to Beat rates switched to the lowest cost provider in their area, collectively they would save an additional $12 million for electricity from September through December of this year.
If 25 percent of all Price to Beat customers switched to the lowest-cost provider in their area, the total savings for September through December would be $58 million.
The report also notes that through August 16, the Electric Reliability Council of Texas (ERCOT) has completed nearly 400,000 requests from residential and small commercial customers to switch electric providers. That number does not include “move-ins” – transactions involving customers who are establishing new service or who have changed addresses but remained with the same electric provider.
While the number of completed switch requests represents about 4.2 percent of residential and small commercial customers in competitive areas, the actual electricity used by customers who have changed providers accounts for 16.6 percent of the total electricity sold.
“Texas’ competitive electric market is still evolving, and we have a lot of work to do, but this is a very good start,” Chairman Klein added. “For the first eight months, we’re very pleased with the level of interest from customers.”
To download a complete copy of the Report Card, which includes a breakdown of estimated savings per traditional service territory, log on to www.puc.state.tx.us/electric/projects/25645/25645.cfm#MRC.
