Residential electricity rates in competitive areas in Texas have gone down in relation to wholesale power prices -- suggesting that Texas electricity providers are minimizing their costs to meet market demand.
That’s according to a paper from Rice University’s Baker Institute for Public Policy.
The study focused on retail competition -- and considered monthly residential billing in Texas since 2016.
In 2002, when competition was initially introduced, the average price paid by residential customers in competitive areas was between 2 and 3 cents higher than the rates paid in noncompetitive areas. This was before market reforms and retail competition could have had a material impact.
However, by 2016, the average price paid by residential customers in competitive market areas had declined to a point of parity with -- and in some cases below -- the average price paid by customers in noncompetitive market areas.
In fact, the price has generally moved in opposite directions across competitive and noncompetitive market areas, and average price in 2016 was higher in noncompetitive areas and lower in competitive areas than it was in 2002.