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What I don’t understand about the Texas electricity market is that, despite how “free” it is, price per kwh isn’t terribly competitive compared to more tightly

What I don’t understand about the Texas electricity market is that, despite how “free” it is, price per kwh isn’t terribly competitive compared to more tightly regulated states - having the highest average residential rates in the West South Central region: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...

vel0city 5y ago
This average price is a bit complicated to look at, and requires even more understanding of the Texas market. There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into. In a co-op, those residents do not get to choose their power plan. Their rates are decided by the co-op, you either have electricity at that rate or you don't. The open market allows for people to choose from many different Retail Electric Providers offering all kinds of plans. Free nights and weekends, but your rate during weekdays is sky high. Discounts below certain usage, with surcharges going over. Discounts once you use a certain amount, with surcharges if you use too little. Different rate prices for different usage amounts. 100% renewable. 0% renewable. 15% renewable. Flat monthly rate. All kinds of various contracts you can sign up for. In that open market, I can choose plans way cheaper than that average rate. I can sign up for a plan with 100% renewable energy with an average rate of 9.8c/kWh for 2,000kWh. https://octopusenergy.com/documents/efls/OCTOPLUS-24M-ONCOR-EN.pdf https://octopusenergy.com/documents/efls/OCTOPLUS-24M-ONCOR-... However, lots of people even in the open market just go with whatever plans they hear on the radio or TV. Any REP with a budget to have TV commercials is going to be one of the more expensive ones. Rhythm - 11.3c/kWh @ 2,000kWh, 100% renewable https://api.gotrhythm.com/api/pricing/offers/latest-offers-efl/676/?locale=en https://api.gotrhythm.com/api/pricing/offers/latest-offers-e... TXU Energy - tons of TV ads - 12.5c/kWh https://www.txu.com/Handlers/PDFGenerator.ashx?comProdId=ONXSIMVL3636AD&lang=en&formType=EnergyFactsLabel&custClass=3&tdsp=ONCOR https://www.txu.com/Handlers/PDFGenerator.ashx?comProdId=ONX... So yeah, some people just buy what they see on TV and pay through the nose. Some aren't really a part of this open market and get whatever their co-op wants to bill them. However, it can be much cheaper to shop online. I'm still on a 36mo contract for <9c/kWh, putting me cheaper than the average of every state. http://powertochoose.org/ http://powertochoose.org/ If you notice in that EIA table, Texas has one of the lowest average commercial and industrial rates in the country. Commercial and industrial customers actually bother looking around at rates and aren't necessarily swayed by the slick looking guy on TV saying "free nights and weekends, 25c/kWh at noon!"
- LoveGracePeace 5y ago
  My wife got a contract with our provider, we pay normal prices during the day but get 100% free power from 8 PM to I think 5 or 6 AM. Can't really complain.
  - vel0city 5y ago
    What does "normal" prices man? After everything is said and done, what is your normal effective per-kWh rate? Most people I've seen with these plans only really get a good deal with a plan like that with a good solar or battery install, or are truly never at home except for those free hours.
    - LoveGracePeace 5y ago
      She pays the bills, she's happy, when she's happy about anything to do with money, with me burning through power with my gaming on several nights per week; it's got to be all good news. Always check to see whether your utility can work a deal.
  - jatone 5y ago
    shit I would invest in a power wall and time shift my power usage to the night.
    - caminante 5y ago
      There are T&Cs like usage caps that make these deals much less valuable than the marketing conveys.
    - LoveGracePeace 5y ago
      Interesting idea! I read caminante's comment about usage caps in context and I'd check before purchasing a powerwall but even if caps were in place with our deal; the powerwall could be nice as a sort of home UPS.
      - 5y ago
nickff 5y ago
It looks like Texas has higher residential, but lower commercial and industrial rates than others. It may be that other states apply policies which depress residential rates at the cost of increasing ‘business’ rates.
- pwr-electronics 5y ago
  That's exactly it. Residential service is naturally the most expensive to operate. National regulations impose price caps on residential. But Texas is the only state that isn't subject to those rules because they're not synchronously connected to another grid. Which on top of that makes them less reliable, and thus more expensive.
- vkou 5y ago
  That's consistent with how Texas approaches governance as a whole. Nickel and dime the residents, bend over backwards for landowners and corporations.
thomascgalvin 5y ago
Deregulation isn't about improving consumer outcomes, it's about improving profits. Expecting it to result in lower cost per kWh is a losing game.
- deleted 5y ago
  [deleted]
- 7thaccount 5y ago
  If you read all the books covering the history of the deregulation of the regulated electric industry in the US, their reasoning was clear. Many years ago, under regulation (and still for those areas of the US that aren't in a market), it was the job of planners to determine the load growth and to build enough supply to meet demand and get a steady ROR. We did really bad at this in (I think it was the 80s), so there was a lot of pushback in making customers pay for generation they didn't need. At the same time, combined cycle plants made it possible to finally de-monopolize the generation side of things. The theory was the free market would be more innovative than the regulated utilities and less wasteful.
  - Spooky23 5y ago
    A big part of that is the 70s/80s inflated destroyed capital budgets and reduced capital spend. Regulators always have a bias towards rate reduction. Once the deregulation movement set in, power generation became a fat hog ready to be exploited. In some cases, investors even got to use tax free municipal borrowing facilities.
  - PaulHoule 5y ago
    "Made possible" also meant that coal burning plants were obsolete and we needed to restructure the generating system so they could go out of business without making the utilities go under. So much in the energy literature looks like a clock that stopped. For instance you still see cost estimates of advanced combustion systems from the 1970s that have been carried into the future without adjusting for inflation and changes in technology. People still compare nuclear power to coal but they quit building coal plants circa 1980 for the same reason they quit building nuclear plants -- the capital cost of the steam turbine is an order of magnitude more than a gas turbine, so even if you get the heat for free a current generation coal or nuclear plant is going to struggle to compete against the power plants we've been building since the 1980s.
jorblumesea 5y ago
Deregulation is about privatizing any possible profits a system might make. The goal is almost never to improve consumer outcomes, but to line the pockets of wealth donors and benefactors. Whenever someone argues for privatization, just follow the money.
imachine1980_ 5y ago
you couldn't have 50 companies in one place and even if you cold the fix cost are high o make it unprofitable, low regulation means less control not more competition in a natural monopoly, making all companies try t extract the most money without making too much attractive to new competences, if you look carefully companies (commercial and industrial) pay less than other countries because they have more bargain power against the power industry but regular citizens cant pay the extra money for a tailor connection and tent to pay what they being offered.
- bo1024 5y ago
  Exactly. For a commodity, free market means free to compete. But for a utility, it means free to extract.
Spooky23 5y ago
Texas is uniquely dominated by energy interests. Most of the quacking about cheapness is just noise. I have a relative who moved from an “expensive” northeast state to South Carolina. His big bitch was about taxes, but he didn’t really do the math. He saved on property taxes, but between more regressive sales tax, HOA, etc it doesn’t really compute. Most significantly, he discovered the tyranny of local government is nothing compared to a HOA that actually runs public services.
- w-ll 5y ago
  NJ to Mcclellanville, SC is my guess. Aside tho actual cost of living is gonna be way cheaper for them.
- philistine 5y ago
  I live in a town next to a border. On the other side of the river, I would save 4K in taxes every year. But I would pay more in car insurance, car registration, city property tax, public transportation and other smaller things. All in all, I pay maybe 1K more to live on my side of the river. That's completely sidestepping the whole issue of housing being way more expensive on the other side, which means I couldn't own a house. Sometimes I feel like I'm the only one of my peers who has actually sat down and counted the beans. Everybody else just looks at the 4K and thinks I'm crazy to live where I live.
- RhysU 5y ago
  They're the same tyranny, no? Someone else claims an amount of your money that they choose to be spent as they choose and you get an 1/N vote in the matter. You can leave whenever you sell.
  - giaour 5y ago
    > They're the same tyranny, no? It's much easier to replace local politicians or constrain/require local government action via the courts than it is to do the same to an HOA, isn't it? In either case, you can vote with your feet, but I prefer being able to vote with a ballot
deleted 5y ago
[deleted]
WillPostForFood 5y ago
price per kwh isn’t terribly competitive compared to more tightly regulated states Texas is half the price of residential electricity compared to California or New York. The other states in in the West South Central region are also low reg or deregulated, and have similar low prices. Texas was been a little lower a few years ago, not sure why it spiked up. There have been some coal plants taken offline, and the cost of outage last year also is affecting rates now.

vel0city 5y ago

This average price is a bit complicated to look at, and requires even more understanding of the Texas market. There are essentially two types of electric customers in ERCOT areas in Texas: those in co-ops and those in open markets where you can choose your Retail Electric Provider and plan. Your physical location determines which kind of market you fall into. In a co-op, those residents do not get to choose their power plan. Their rates are decided by the co-op, you either have electricity at that rate or you don't. The open market allows for people to choose from many different Retail Electric Providers offering all kinds of plans. Free nights and weekends, but your rate during weekdays is sky high. Discounts below certain usage, with surcharges going over. Discounts once you use a certain amount, with surcharges if you use too little. Different rate prices for different usage amounts. 100% renewable. 0% renewable. 15% renewable. Flat monthly rate. All kinds of various contracts you can sign up for. In that open market, I can choose plans way cheaper than that average rate. I can sign up for a plan with 100% renewable energy with an average rate of 9.8c/kWh for 2,000kWh. https://octopusenergy.com/documents/efls/OCTOPLUS-24M-ONCOR-EN.pdf https://octopusenergy.com/documents/efls/OCTOPLUS-24M-ONCOR-... However, lots of people even in the open market just go with whatever plans they hear on the radio or TV. Any REP with a budget to have TV commercials is going to be one of the more expensive ones. Rhythm - 11.3c/kWh @ 2,000kWh, 100% renewable https://api.gotrhythm.com/api/pricing/offers/latest-offers-efl/676/?locale=en https://api.gotrhythm.com/api/pricing/offers/latest-offers-e... TXU Energy - tons of TV ads - 12.5c/kWh https://www.txu.com/Handlers/PDFGenerator.ashx?comProdId=ONXSIMVL3636AD&lang=en&formType=EnergyFactsLabel&custClass=3&tdsp=ONCOR https://www.txu.com/Handlers/PDFGenerator.ashx?comProdId=ONX... So yeah, some people just buy what they see on TV and pay through the nose. Some aren't really a part of this open market and get whatever their co-op wants to bill them. However, it can be much cheaper to shop online. I'm still on a 36mo contract for <9c/kWh, putting me cheaper than the average of every state. http://powertochoose.org/ http://powertochoose.org/ If you notice in that EIA table, Texas has one of the lowest average commercial and industrial rates in the country. Commercial and industrial customers actually bother looking around at rates and aren't necessarily swayed by the slick looking guy on TV saying "free nights and weekends, 25c/kWh at noon!"

LoveGracePeace 5y ago
My wife got a contract with our provider, we pay normal prices during the day but get 100% free power from 8 PM to I think 5 or 6 AM. Can't really complain.
- vel0city 5y ago
  What does "normal" prices man? After everything is said and done, what is your normal effective per-kWh rate? Most people I've seen with these plans only really get a good deal with a plan like that with a good solar or battery install, or are truly never at home except for those free hours.
  - LoveGracePeace 5y ago
    She pays the bills, she's happy, when she's happy about anything to do with money, with me burning through power with my gaming on several nights per week; it's got to be all good news. Always check to see whether your utility can work a deal.
- jatone 5y ago
  shit I would invest in a power wall and time shift my power usage to the night.
  - caminante 5y ago
    There are T&Cs like usage caps that make these deals much less valuable than the marketing conveys.
  - LoveGracePeace 5y ago
    Interesting idea! I read caminante's comment about usage caps in context and I'd check before purchasing a powerwall but even if caps were in place with our deal; the powerwall could be nice as a sort of home UPS.
    - 5y ago

nickff 5y ago

It looks like Texas has higher residential, but lower commercial and industrial rates than others. It may be that other states apply policies which depress residential rates at the cost of increasing ‘business’ rates.

pwr-electronics 5y ago
That's exactly it. Residential service is naturally the most expensive to operate. National regulations impose price caps on residential. But Texas is the only state that isn't subject to those rules because they're not synchronously connected to another grid. Which on top of that makes them less reliable, and thus more expensive.
vkou 5y ago
That's consistent with how Texas approaches governance as a whole. Nickel and dime the residents, bend over backwards for landowners and corporations.

thomascgalvin 5y ago

Deregulation isn't about improving consumer outcomes, it's about improving profits. Expecting it to result in lower cost per kWh is a losing game.

deleted 5y ago
[deleted]
7thaccount 5y ago
If you read all the books covering the history of the deregulation of the regulated electric industry in the US, their reasoning was clear. Many years ago, under regulation (and still for those areas of the US that aren't in a market), it was the job of planners to determine the load growth and to build enough supply to meet demand and get a steady ROR. We did really bad at this in (I think it was the 80s), so there was a lot of pushback in making customers pay for generation they didn't need. At the same time, combined cycle plants made it possible to finally de-monopolize the generation side of things. The theory was the free market would be more innovative than the regulated utilities and less wasteful.
- Spooky23 5y ago
  A big part of that is the 70s/80s inflated destroyed capital budgets and reduced capital spend. Regulators always have a bias towards rate reduction. Once the deregulation movement set in, power generation became a fat hog ready to be exploited. In some cases, investors even got to use tax free municipal borrowing facilities.
- PaulHoule 5y ago
  "Made possible" also meant that coal burning plants were obsolete and we needed to restructure the generating system so they could go out of business without making the utilities go under. So much in the energy literature looks like a clock that stopped. For instance you still see cost estimates of advanced combustion systems from the 1970s that have been carried into the future without adjusting for inflation and changes in technology. People still compare nuclear power to coal but they quit building coal plants circa 1980 for the same reason they quit building nuclear plants -- the capital cost of the steam turbine is an order of magnitude more than a gas turbine, so even if you get the heat for free a current generation coal or nuclear plant is going to struggle to compete against the power plants we've been building since the 1980s.

jorblumesea 5y ago

Deregulation is about privatizing any possible profits a system might make. The goal is almost never to improve consumer outcomes, but to line the pockets of wealth donors and benefactors. Whenever someone argues for privatization, just follow the money.

imachine1980_ 5y ago

you couldn't have 50 companies in one place and even if you cold the fix cost are high o make it unprofitable, low regulation means less control not more competition in a natural monopoly, making all companies try t extract the most money without making too much attractive to new competences, if you look carefully companies (commercial and industrial) pay less than other countries because they have more bargain power against the power industry but regular citizens cant pay the extra money for a tailor connection and tent to pay what they being offered.

bo1024 5y ago
Exactly. For a commodity, free market means free to compete. But for a utility, it means free to extract.

Spooky23 5y ago

Texas is uniquely dominated by energy interests. Most of the quacking about cheapness is just noise. I have a relative who moved from an “expensive” northeast state to South Carolina. His big bitch was about taxes, but he didn’t really do the math. He saved on property taxes, but between more regressive sales tax, HOA, etc it doesn’t really compute. Most significantly, he discovered the tyranny of local government is nothing compared to a HOA that actually runs public services.

w-ll 5y ago
NJ to Mcclellanville, SC is my guess. Aside tho actual cost of living is gonna be way cheaper for them.
philistine 5y ago
I live in a town next to a border. On the other side of the river, I would save 4K in taxes every year. But I would pay more in car insurance, car registration, city property tax, public transportation and other smaller things. All in all, I pay maybe 1K more to live on my side of the river. That's completely sidestepping the whole issue of housing being way more expensive on the other side, which means I couldn't own a house. Sometimes I feel like I'm the only one of my peers who has actually sat down and counted the beans. Everybody else just looks at the 4K and thinks I'm crazy to live where I live.
RhysU 5y ago
They're the same tyranny, no? Someone else claims an amount of your money that they choose to be spent as they choose and you get an 1/N vote in the matter. You can leave whenever you sell.
- giaour 5y ago
  > They're the same tyranny, no? It's much easier to replace local politicians or constrain/require local government action via the courts than it is to do the same to an HOA, isn't it? In either case, you can vote with your feet, but I prefer being able to vote with a ballot

deleted 5y ago

[deleted]

WillPostForFood 5y ago

price per kwh isn’t terribly competitive compared to more tightly regulated states Texas is half the price of residential electricity compared to California or New York. The other states in in the West South Central region are also low reg or deregulated, and have similar low prices. Texas was been a little lower a few years ago, not sure why it spiked up. There have been some coal plants taken offline, and the cost of outage last year also is affecting rates now.