The document summarizes retail electricity prices in Texas from 2001 to 2012. It finds that:
1) Price offers are substantially lower than in 2001, even when adjusted for inflation, as retail electric prices have fallen while other energy prices have risen.
2) Texas' national electric price ranking has improved since retail competition began in 2001, and every competitive area in Texas has offers lower than the national average.
3) Among states dependent on natural gas for power, Texas prices compare favorably to other states.
4) The Texas electricity market provides prices that track natural gas prices efficiently.
Wind Development in Texas: History and Future Growth
Fall Update on the Competitive Retail Market in ERCOT
1. Update on Retail Prices in the
ERCOT 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 • www.aect.net
2. The ERCOT Competitive Retail Electric
Market is Providing Strong Customer
Benefits!
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. 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¢/kWh
Sources: PUC Historical Data, Bureau of Labor and Statistics, www.powertochoose.org offers as of November 1, 2012 3
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
powertochoose.org Web site as of 7/15/12 for a residential customer using an average of 1,000 kWh per month.
4
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: PowerToChoose.org offers as of April 16, 2012,
Connec]cut"
New"York"
Alaska"
Hawaii"
U.S. Energy Information Administration, July 2012 data (latest available)
Sources: PowerToChoose.org offers as of July 15, 2012,
5
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 Offer
Sources: Public Utility Commission of Texas, U.S. Energy Information Association, NYMEX Commodity Exchange, Bureau of Labor Statistics, Power to
Choose
Notes: Commodity prices latest available as of November 13, 2012.
Inflation covers period from 2001 to 2012 6
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;
powertochoose.org as of 7/15/12.
Note: Texas statewide average price includes prices from both competitive and regulated areas of the state.
7
8. ERCOT market providing efficient
Market prices
NYMEX
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; www.powertochoose.org
8
9. Since January 2007, Texas’ Prices Have
Fallen 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), powertochoose.org for
January 2, 2007 and July 15, 2012 9