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Fall Update on the Competitive Retail Market in ERCOT


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Fall Update on the Competitive Retail Market in ERCOT

  1. 1. Update on Retail Prices in theERCOT Competitive Electric Market ! Fall 2012!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 •
  2. 2. The ERCOT Competitive Retail ElectricMarket is Providing Strong CustomerBenefits! Key Takeaways –  Price offers are substantially lower than prices available just before competition began, especially when adjusted for inflation. –  Retail electric prices have fallen even as other energy commodity prices – such as gasoline, crude oil, natural gas and coal – have risen. –  Texas’ national electric price ranking has improved since the market opened in 2001. –  Every competitive area in ERCOT has variable and 1-year lock offers available that are far lower than the national average price and nearly all state averages. –  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. –  The ERCOT market provides efficient market prices that track natural gas prices. –  Since 2007, Texas’ prices have fallen while other states’ prices have risen. 2
  3. 3. Lower Prices Available Today than Before Competition Began Dec. 2001 Lowest Fixed-Price Lowest Dec. 2001 prices, not Service Area Offer Available prices, adjusted adjusted for (12-month term) Offer for inflation inflation AEP Texas Central 9.3¢/kWh 7.0¢/kWh 9.6¢/kWh 12.5¢/kWh AEP Texas North 8.5¢/kWh 5.3¢/kWh 10.0¢/kWh 13.1¢/kWh CenterPoint Energy 9.2¢/kWh 6.0¢/kWh 10.4¢/kWh 13.6¢/kWh Oncor 8.5¢/kWh 5.3¢/kWh 9.7¢/kWh 12.7¢/kWh TNMP 8.7¢/kWh 6.0¢/kWh 10.6¢/kWh 13.9¢/kWhSources: PUC Historical Data, Bureau of Labor and Statistics, offers as of November 1, 2012 3
  4. 4. Texas’ 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 2012 State Ranking (Latest Available) 26 24 22 Average lowest 12- 20 month fixed price 18 offer in competitive 16 market in July 2012: 14 8.6¢/kWh 12¢/kWh 10 8 6 4 2 0 FL WY MT VT NY ID IN ND MS SD NC TX MO NE SC KS OH CO DC DE WI RI NH NJ HI MI KY TN UT CT AK MN NM MD IL AZ OR ME AL OK IA AR CA WA MA VA PA LA GA NV WV Source: EIA average annual residential rates for 2001 and April 2012 monthly data (latest available information). Average lowest available price from Web site as of 7/15/12 for a residential customer using an average of 1,000 kWh per month. 4
  5. 5. CENTS&PE&R&KWH& 0" 2" 4" 6" 8" 10" 12" 14" 16" 18" 20" LOWEST"DALLAS/FT"WORTH"PRICE" LOWEST"ABILENE"PRICE" LOWEST"DALLAS/FT"WORTH"PRICE"9"1"YR" LOWEST"LEWISVILLE"PRICE" LOWEST"CORPUS"CHRISTI"PRICE" LOWEST"HOUSTON"PRICE" LOWEST"ABILENE"PRICE"9"1"YR"FIXED" Louisiana" LOWEST"LEWISVILLE"PRICE"9"1"YR"FIXED" Na>onal&Average& Washington" LOWEST"HOUSTON"PRICE"9"1"YR"FIXED" Kentucky" Oklahoma"LOWEST"CORPUS"CHRISTI"PRICE"9"1"YR"FIXED" Idaho" Arkansas" Indiana" West"Virginia" Tennessee" North"Dakota" Mississippi" Oregon" Wyoming" South"Dakota" Montana" Utah" Illinois" North"Carolina" Every Competitive Area in ERCOT Has Texas"(Statewide)" Missouri" Variable and 1-Year Lock Offers Available Nebraska" South"Carolina" Alabama" Nevada" Virginia" that are Lower than the National Average Price Florida" Iowa" Kansas" All&Data&from&July&2012& Arizona" Minnesota" Georgia" US"AVERAGE" Ohio" New"Mexico" RESIDENTIAL&RETAIL&ELECTRICITY&PRICES" Colorado" District"of"Columbia" Pennsylvania" Maryland" Delaware" Wisconsin" Rhode"Island" Massachuse[s" Maine" Michigan" California" New"Hampshire" New"Jersey" Vermont" U.S. Energy Information Administration, latest available data Sources: offers as of April 16, 2012, Connec]cut" New"York" Alaska" Hawaii"U.S. Energy Information Administration, July 2012 data (latest available) Sources: offers as of July 15, 2012,5
  6. 6. Retail Electric Price Offers Have Fallen Even as Other Energy Commodity Prices Have Risen 320% 209% Percentage Change in Commodities December 2001 – November 2012 101% 43% 31% -13% -41% Oil Gasoline PRB Coal Natural Gas Inflation ERCOT Avg. ERCOT Avg. Low Fixed Offer Lowest OfferSources: Public Utility Commission of Texas, U.S. Energy Information Association, NYMEX Commodity Exchange, Bureau of Labor Statistics, Power toChooseNotes: Commodity prices latest available as of November 13, 2012. Inflation covers period from 2001 to 2012 6
  7. 7. Texas Market Compares Favorably to Other 
States Utilizing Natural Gas as the Primary 
Generation Source! Average Residential Electric Price Among Natural Gas-Intensive States July 2012 (Latest Available Consistent Data) 20.00 18.00 Average Lowest Available 12- 16.00 Month Fixed Price Offer in ERCOT Competitive Market 14.00 (July 2012): 8.6¢/kWh 12.00 ¢/kWh 10.00 8.00 6.00 4.00 2.00 0.00 AK NY CA ME MA RI FL NV TX MS LA Sources: Energy Information Administration (data as of July 2012); EIA natural gas-intensive states; as of 7/15/12. Note: Texas statewide average price includes prices from both competitive and regulated areas of the state. 7
  8. 8. ERCOT market providing efficient Market pricesNYMEX  natural  gas  and  residen2al  electricity  prices  January  2007  –  October  8,  2012;  mixed  measures  NYMEX  natural  gas  ($/MMBtu)   NYMEX  Average  12-­‐Month  Strip   Average  Compe22ve  Offer   $14 Average  Lowest  12  Month  Fixed  Offer   32 Average  Lowest  Offer   ¢ $12 28                              Residen8al  electricity  (¢/kWh)   ¢ $10 24 $8 20¢ $6 16 ¢ $4 12 $2 8¢ $0 4¢ 1/1 11/19 4/21 5/11 6/1 11/1 3/21 3/30 6/15 9/23 12/8 2/23 7/27 3/15 8/16 1/17 8/22 1/23 6/25 9/10 11/7 9/4 2/4 7/7 6/6 4/9 10/12 12/28 2007   2008   2009   2010   2011   2012   1 Average electric offers across the 5 TDSP’s for residential customers using an average of 1,000 kWh per month. Excludes any 0.0¢/kWh introductory offers. Sources: NYMEX; 8
  9. 9. Since January 2007, Texas’ Prices HaveFallen While Others Have Risen Residential Price Changes (%) - Jan 2007 - July 2012 65 Restructured US Average States (excl. TX) Gas-Dependent (excl. TX) 23% 45 States (excl. TX) 18% 2% 25 Texas -8% 5 WY TX Competitive TX Statewide Natural Gas States (-TX) Restructured States (-TX) WI NJ SC IN TN MD MN SD NM WV ID US (-TX) ME MS OR CO OH MI NH AR DC NC MT ND NV DE NY KY KS NE RI IA HI CT LA AL UT AZ PA VA VT WA MO IL FL MA OK GA CA AK -15 Lowest Competitive Offer Prices in Texas -35 -28% Source: EIA average annual residential rates for January 2007 and July 2012 (latest available data), for January 2, 2007 and July 15, 2012 9
  10. 10. Web: AECT.netBlog: AECTnet.wordpress.comTwitter: AECT AdvocacyEmail: 10!