Electricity provider switching: Difference between revisions
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===The status of Texas electrical deregulation: Six years later=== |
===The status of Texas electrical deregulation: Six years later=== |
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The primary claim of deregulation supporters was one of lower electric rates.<ref>[http://www.texasobserver.org/article.php?aid=2243 Overrated: Deregulation was supposed to lower Texans' electric bills. Instead, rates are through the roof] Texasobserver.org June 29, 2006</ref> Since electrical deregulation was implemented in Texas in 2002, the residential rate for electricity has been increased seven times, leaving the current Price To Beat at around 15 cents per kilowatt (as of July 26, 2006, www.powertochoose.org). The average American rate is about 9.78 cents per kilowatt, similar to that of the few regions in Texas which chose not to deregulate; for example, Austin residents only pay 10 cents per kilowatt. While it is true that residents of some Texas regions have access to over a dozen different competitors, those competitors offer only a small discount from 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). |
The primary claim of deregulation supporters was one of lower electric rates.<ref>[http://www.texasobserver.org/article.php?aid=2243 Overrated: Deregulation was supposed to lower Texans' electric bills. Instead, rates are through the roof] Texasobserver.org June 29, 2006</ref> Since electrical deregulation was implemented in Texas in 2002, the residential rate for electricity has been increased seven times, leaving the current Price To Beat at around 15 cents per kilowatt (as of July 26, 2006, www.powertochoose.org). The average American rate is about 9.78 cents per kilowatt, similar to that of the few regions in Texas which chose not to deregulate; for example, Austin residents only pay 10 cents per kilowatt. While it is true that residents of some Texas regions have access to over a dozen different competitors, those competitors offer only a small discount from 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). |
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Using the Austin rate of 10 cents per kilowatt as a model of still-regulated pricing, the citizens of Texas in deregulated markets pay a premium of 29% above what would be their likely rate had Texas never experimented with deregulation. Regarding the expectation of lower rates, deregulation has been a [http://www.texasobserver.org/article.php?aid=2243 failure.] This same result has repeated itself in every application of residential electrical deregulation in America since the movement started in the 1990s. In fact, many states are now putting their plan to deregulate on hold<ref>[http://www.bizjournals.com/pittsburgh/stories/2006/07/03/story3.html Local electricity rates on the rise] ''[[Pittsburgh Business Times]]'' July 3, 2006</ref> because lower rates have yet to be achieved in any of the deregulated states. |
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If environmental impact is the test for success, then the results are a mixture of good and bad. Flush with profits from the 29% premium being charged to Texas residents in deregulated markets, producers like TXU proposed eleven new coal-fired powerplants which, compared to natural gas-fired powerplants, produce more pollution and higher profits (coal is cheaper than natural gas on a per-produced-kilowatt basis). This effort was supported by [[Rick Perry|Texas Governor Rick Perry]] who put the proposed plants on a "fast track" process for permits in an effort to be grandfathered in under more lenient EPA pollution rules.<ref>[http://www.citizen.org/pressroom/release.cfm?ID=2131 Proposed Coal-Burning Power Plants Threaten the Health of Texans] ''Public Citizen'' Feb. 7, 2006</ref> Because the Dallas/Fort Worth region already has such a serious smog problem, many public organizations, such as the Environmental Defense Fund, and politicians objected this plan. In a notable moment for climate change activists, TXU withdrew its proposals for eight of the eleven plants on February 25, 2007. This was also a result of Texas Pacific Group and Kohlberg Kravis Roberts & Co's acquisition of TXU Corp. On a renewable note, the ballooning profits from Texas electrical providers has drawn considerable investment by wind-turbine companies. In fact, Texas surpassed California in wind energy production in July 2006.{{citation needed|date=February 2011}} |
If environmental impact is the test for success, then the results are a mixture of good and bad. Flush with profits from the 29% premium being charged to Texas residents in deregulated markets, producers like TXU proposed eleven new coal-fired powerplants which, compared to natural gas-fired powerplants, produce more pollution and higher profits (coal is cheaper than natural gas on a per-produced-kilowatt basis). This effort was supported by [[Rick Perry|Texas Governor Rick Perry]] who put the proposed plants on a "fast track" process for permits in an effort to be grandfathered in under more lenient EPA pollution rules.<ref>[http://www.citizen.org/pressroom/release.cfm?ID=2131 Proposed Coal-Burning Power Plants Threaten the Health of Texans] ''Public Citizen'' Feb. 7, 2006</ref> Because the Dallas/Fort Worth region already has such a serious smog problem, many public organizations, such as the Environmental Defense Fund, and politicians objected this plan. In a notable moment for climate change activists, TXU withdrew its proposals for eight of the eleven plants on February 25, 2007. This was also a result of Texas Pacific Group and Kohlberg Kravis Roberts & Co's acquisition of TXU Corp. On a renewable note, the ballooning profits from Texas electrical providers has drawn considerable investment by wind-turbine companies. In fact, Texas surpassed California in wind energy production in July 2006.{{citation needed|date=February 2011}} |
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Revision as of 18:17, 23 July 2011
 | This article possibly contains original research. (February 2011) |
 | This article needs to be updated. (February 2011) |
Electricity provider switching is the ability of power consumers to have an option—or the "power to choose" -- their electricity provider in a deregulated electricity market as permitted by a state public utilities governing body.
Australia
The Australian market has been somewhat deregulated, but still sees consumers provided with a narrow band of choices. Due to these deregulations, companies are springing up to help consumers find the best priced electricity, which given it is a commodity has allowed for downward pressure on pricing and a more affordable quality of life for the average Australian.[citation needed]
Canada
Electricity is deregulated in 2 Canadian provinces; Ontario and Alberta. Both markets showed price spikes in the first year of dereguation, but then settled down into a volatile but reasonably stable environment. Alberta's market is dominated by fossil fuel generation and as such reacts more closely to the price of natural gas. Ontario's generation mix is about 50% nuclear.[citation needed]
Electricity provider switching is difficult unless the customer is buying from the utility or is at the end of a fixed price contract. There is a price comparison service operation in Canada.
United Kingdom
Electricity supply has also been deregulated in the United Kingdom. For a list of suppliers see: Category:Power companies of the United Kingdom at the foot of the page.
United States
 | It has been suggested that Maryland Electric Deregulation, Deregulation of the Texas electricity market and Community Choice Aggregation be merged into this article. (Discuss) Proposed since November 2009. |
In deregulated markets such as Texas and Maryland, the state government may require the incumbent utility energy provider to allow for unlimited competition within the marketplace, where the consumer is free to choose any electricity provider.
Currently, roughly a dozen of the lower 48 contiguous United States allow for consumer choice in electricity providers, with Texas being the most-widely watched deregulatory scheme. Many other states are surveying the Texas deregulatory model in order to ape its design as a paradigm for the imposition of free market forces within such other power markets.[citation needed]
Electricity provider switching is only practical if a customer is either buying from a utility, or is at the end of a fixed price contract with a provider.
The status of Texas electrical deregulation: Six years later
The primary claim of deregulation supporters was one of lower electric rates.[1] Since electrical deregulation was implemented in Texas in 2002, the residential rate for electricity has been increased seven times, leaving the current Price To Beat at around 15 cents per kilowatt (as of July 26, 2006, www.powertochoose.org). The average American rate is about 9.78 cents per kilowatt, similar to that of the few regions in Texas which chose not to deregulate; for example, Austin residents only pay 10 cents per kilowatt. While it is true that residents of some Texas regions have access to over a dozen different competitors, those competitors offer only a small discount from 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).
If environmental impact is the test for success, then the results are a mixture of good and bad. Flush with profits from the 29% premium being charged to Texas residents in deregulated markets, producers like TXU proposed eleven new coal-fired powerplants which, compared to natural gas-fired powerplants, produce more pollution and higher profits (coal is cheaper than natural gas on a per-produced-kilowatt basis). This effort was supported by Texas Governor Rick Perry who put the proposed plants on a "fast track" process for permits in an effort to be grandfathered in under more lenient EPA pollution rules.[2] Because the Dallas/Fort Worth region already has such a serious smog problem, many public organizations, such as the Environmental Defense Fund, and politicians objected this plan. In a notable moment for climate change activists, TXU withdrew its proposals for eight of the eleven plants on February 25, 2007. This was also a result of Texas Pacific Group and Kohlberg Kravis Roberts & Co's acquisition of TXU Corp. On a renewable note, the ballooning profits from Texas electrical providers has drawn considerable investment by wind-turbine companies. In fact, Texas surpassed California in wind energy production in July 2006.[citation needed]
As electric bills have quickly ballooned due to rising rates, residents are proactively trying to reduce their electrical usage by raising the thermostat setting, installing insulation, installing solar screens, and other such activities. So as with all utilities, usage decreases as the prices rapidly elevate as they have in Texas since deregulation set in.[citation needed]
See also
References
- ^ Overrated: Deregulation was supposed to lower Texans' electric bills. Instead, rates are through the roof Texasobserver.org June 29, 2006
- ^ Proposed Coal-Burning Power Plants Threaten the Health of Texans Public Citizen Feb. 7, 2006
External links