Electricity 101: Retail Update October 27, 2011!Legislative advertising paid for by: John W. Fainter, Jr. • President and CEO Association of Electric Companies of Texas, Inc. 1005 Congress, Suite 600 • Austin, TX 78701 • phone 512-474-6725 • fax 512-474-9670 • www.aect.net
AECT Principles! • AECT is an advocacy group composed of member companies committed to: - Ensuring a modern, reliable infrastructure for the supply & delivery of electricity. - Supporting efficient competitive markets that are fair to customers and market participants. - Supporting consistent and predictable oversight and regulation that will promote investment and ensure the stability of Texas’ electric industry. - Promoting an economically strong and environmentally healthy future for Texas, including conservation and efficient use of available resources. • AECT member companies remain dedicated to providing Texas customers with reliable service and are committed to the highest standards of integrity. The Association of Electric Companies of Texas, Inc. (AECT) is a trade organization of investor- owned electric companies in Texas. Organized in 1978, AECT provides a forum for member company representatives to exchange information about public policy, and to communicate with government officials and the public. For more information, visit www.aect.net. 2
AECT Member Companies!Within ERCOT! Retail Electric Providers Transmission and Distribution Utilities Generation Companies 3
AECT Companies!Outside of ERCOT! SERC Reliability Corporation Southwest Power Pool (SPP) Western Electricity Coordinating Council (WECC) 4
The ERCOT Competitive Retail ElectricMarket is Providing Strong CustomerBeneﬁts! Key Takeaways – Price offers are lower than they were one year ago, and, when adjusted for inflation, substantially lower than prices available just before competition began. – Retail electric price offers have improved, despite the increased price of energy commodities, such as gasoline, crude oil, natural gas and coal. – Among states, like Texas, that depend heavily on natural gas for power generation, Texas prices compare favorably, with even lower prices available to those in the competitive market. – From January 2006 to July 2011, the average fixed offer price in the competitive market has fallen by 33 percent, while the average U.S. electric price outside Texas has risen by 21 percent. – The System Benefit Fund (SBF) provided benefits for low-income Texans during the summer. Several retailers, including AECT member companies, also offer additional low-income customer assistance programs, so customers should also contact their REP to learn more about the options that might be available to them. 5
Competitive Market BringingSustained Lower Price Offers Prices in the competitive market have remain low over the past yearSource: www.powertochoose.org; prices are a simple average among service territories. 6
Lower Prices Available Today than Before Competition BeganSources: PUC Historical Data, Bureau of Labor and Statistics, www.powertochoose.org offers as of October 27, 2011 7
Competitive Residential Electric Price Offers !Have Fallen Since Just Before Full Competition Began in January 2007! Texas-New Mexico Power Co. AEP Texas North Service Territory Service Territory Change in Average Change in Average 1yr Fixed-Price Offer: 1yr Fixed-Price Offer: 35% decrease 29% decrease Oncor Service Territory Change in Average 1yr Fixed-Price Offer: 37% decrease CenterPoint Energy Service Territory AEP Texas Central Change in Average Service Territory 1yr Fixed-Price Offer: 35% decrease Change in Average 1yr Fixed-Price Offer: 39% decrease Since December 2006, competitive price offers for residential customers have fallen in every service area.Source: http://www.powertochoose.org (12/31/06 & 10/27/11) 8
Texasʼ National Price Ranking Has Improved Since 2001 18 2001 State Ranking (Pre-Competition) 16¢/kWh 14 12 10 8 6 4 2 0 KY WA WV WY MT MO OK MS GA VA WI MI AZ IA TX PA AK MA VT ME ID OR TN NE UT IN AL SD CO MN KS MD SC AR LA OH FL DE IL NM NV NJ CT CA RI NY HI ND DC NC NH July 2011 State Ranking (Latest Available) Average lowest Average lowest 12- available offer in month fixed price competitive offer in competitive market in market in July 2011: July 2011: 5.1/kWh 8.8¢/kWh¢/kWh Source: EIA average annual residential rates for 2001 and July 2011 monthly data (latest available information). Average lowest available price from powertochoose.org Web site as of 7/30/11 for a residential customer using an average of 1,000 kWh per month. 9
Every Competitive Area in ERCOT HasVariable and 1-Year Lock Offers Availablethat are Lower than the National Average Price Sources: PowerToChoose.org offers as of July 30, 2011, U.S. Energy Information Administration, latest available data 10
Texas Generation Mix Compared to U.S. Average! Texas U.S. Average Renewable Petroleum Other (Mostly Petroleum) Energy (MWh) (Mostly Wind) Renewable 5.6% (Mostly Hydro) 0.9% 0.4% Natural Gas Nuclear 10.1% 10.5% 23.3% Nuclear 47.6% 20.2% 35.0% Natural Gas 44.5% Coal Coal Renewable Petroleum Other (Mostly Summer Capacity (MW) (Mostly Wind) 9.9% Petroleum) 7.7% Natural Gas Nuclear 4.8% 0.2% Renewable (Mostly Hydro) 12.4% 39.1% 19.7% Nuclear 9.9% Coal 64.9% 30.7% Natural Gas CoalNote: Numbers may not add up to 100% due to rounding.Source: EIA (2009 Data) 11
Texas Market Compares Favorably to Other States Utilizing Natural Gas as the Primary Generation Source! Average Lowest Available 12- Month Fixed Price Offer in ERCOT Competitive Market (July 2011): 8.8¢/kWh Sources: Energy Information Administration (data as of July 2011); EIA natural gas-intensive states; powertochoose.org as of 7/30/11. Note: Texas statewide average price includes prices from both competitive and regulated areas of the state. 12
Since January 2007, Texasʼ Prices HaveFallen While Others Have Risen Residential Price Changes (%) - Jan 2007 - July 2011 70 Restructured 60 States US Average (excl. TX) 50 (excl. TX) 22% 21% 40 Gas-Dependent States (excl. TX) 30 5% 20 Texas -6% 10 0 ME NH AR MS NC US (-TX) OR DC NJ MN MD OH ND NV DE NY SC KY SD KS NE TX Competitive TX Statewide RI IN ID HI Natural Gas States (-TX) CT UT AL TN AZ VT WA WY WV MO Restructured States (-TX) IL FL WI MA NM CO OK GA MI CA MT AK IA LA PA VA -10 Lowest Competitive -20 Offer Prices in Texas -34% -30 Source: EIA average annual residential rates for January 2007 and July 2011 (latest available data), powertochoose.org for January 2, 2007 and July 30. 2011 13
Beneﬁts for Qualiﬁed!Customers: REP Programs!• Several retail electric providers across the state also provide additional, voluntary programs to assist low-income customers. – The Care to Share Fund provides bill payment assistance to eligible First Choice Power residential customers in need of emergency funding. Customers can donate to the Care to Share Fund and assist residential customers who need a little extra help. – In 2011, nearly $800,000 in bill payment assistance was committed to Reliants CARE program. Non- profit social service agencies review customer cases and qualify customers CARE funds based upon the agencys designated hardship criteria. In addition, more than a dozen Beat the Heat Centers were offered by Reliant in Corpus Christi, Dallas and Houston to provide heat relief in high-need areas. – Below is information on several programs offered by TXU Energy. – TXU Energy operates TXU Energy Aid, the largest bill-payment assistance program among electricity companies in the nation. The company committed $25 million over 5 years (through 2012) to this program which has helped over 390,000 Texas families since 1983. – TXU Energy also works collaboratively with ~1,000 agencies across the state to assist customers in need. – In addition, TXU Energy uniquely provides a self-funded, year-round low-income customer discount of ~10 percent. The company committed $125 million over 5 years (through 2012) for this program which assisted over 150,000 customers this summer. Since 2008, the company has also helped 18,000 low income households reduce their energy consumption through grants invested in energy efficiency improvements. – Since September 2006, several REPs have participated in the low-income credit program resulting from CenterPoint Energy’s 2006 rate case settlement. This program is currently providing a credit of $7.68 per month to eligible customers.• Texans can check their electric provider’s Web site or call their provider to see what other programs are available. 14
Web: AECT.netBlog: AECTnet.wordpress.comTwitter: twitter.com/AECTnetFacebook: Association of Electric Companies of Texas, Inc.Email: email@example.com 15!
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