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About 85% of Texas residents purchase their electricity in a deregulated, competitive market, while the electric rates in a few major metropolitan areas (Austin, San Antonio) are regulated by the State.  Residential electricity prices in Texas’ deregulated market dipped below the national average price for power in 2012, according to a recent report by the Texas Coalition for Affordable Power (TCAP), but  deregulated prices still remain significantly higher than prices in the regulated areas of Texas.

The Texas electric deregulation law, adopted in 1999, gives consumers in most areas of Texas the ability to source their electricity from competing retail providers. About 15% of the state is exempt from the competitive system, including Austin and San Antonio. The TCAP report examined this unique environment by comparing the two systems based on their impact on residential electricity prices.

Key findings from the report:

  • Since 2008 average electricity prices in deregulated areas of Texas have been declining, and dipped below the national average for the first time in 2012.
  • Despite the drop in deregulated prices, on average, residential customers in deregulated areas pay significantly higher rates than Texans in exempt areas.
  • Customers living in typical households in deregulated areas, on average, have paid more than $4,500 since 2002 than Texans living  in regulated areas.

What’s your view of these findings? How does this report impact the debate on regulated vs. unregulated electricity service?