Dallas Pays More for Electricity than Austin or San Antonio. Thanks, Deregulation.

Categories: Biz

NASADallasAerial.jpg
NASA
Dallas is the light blot up top. The expensive-looking one.
There exist, floating around the Internet and stuffed into the filing cabinets of public-interest watchdogs, an trove of eminently credible reports and white papers explaining in painstaking detail why and how Texas' decade-old experiment with electricity deregulation has failed. But there's an easier way to show how the free market has screwed over the state's electricity-using humans: compare rates in the small number of Texas cities (Austin, San Antonio, San Marcos) that own their electric utility and thus weren't directly affected by deregulation with rates in the large number of cities (Dallas and pretty much everyone else) that were.

That this comparison can be made is a historical fluke. Tom "Smitty" Smith, director of the Texas office of Public Citizen says Texas' municipal and cooperatively owned electric providers tend to be in Central Texas, "where historically they were settled by German utopians and populists. There's a long tradition of community ownership of assets." This, and a push for economic development, drove Austin to establish a public electric utility in the 1890s. San Antonio's came later, after it took over a private provider that went bankrupt after World War II, unable in peacetime to handle the debt incurred it had incurred serving the city's military boom. Dallas and Houston, by contrast, have always had private utilities.

Before deregulation, private companies operating as a regulated monopoly with the advantage of scale offered similar or slightly lower rates than municipal providers or co-ops. After, the picture was flipped for reasons that seem rather obvious in retrospect.

"It is because they [municipal providers] are managed for the benefit of the community as opposed to making profits," Smith says. "And then, secondly, the [private utilities] when they deregulate it, they are split between the generation company (e.g. Luminant) the distribution company (e.g. Oncor) and the retail company (e.g. TXU), each of which is making a profit on selling you electricity."

The results can be found on the Public Utility Commission's webpage by anyone with the tenacity to navigate the site. Here's how it breaks down for June 2014: In Austin, a residential user consuming 500 kilowatt hours of electricity paid $52.35; in San Marcos, $52.64; San Antonio, $55.67.

Average price across municipal plans: $53.55.

In the Dallas area, for the same month and same amount of usage, TXU's cheapest plan costs $69.79; Ambit's is $66.58; Reliant and others offer plans in the mid-$50 range, but they are all variable-rate plans customers tend to hate, in which the price per killowatt hour can inexplicably skyrocket from one month to the next.

The average price of each private company's cheapest plan: $59.82. Remove the variable-rate options, and the average becomes $63.69.

In other words, the hard-working people of Dallas are paying somewhere between 12 percent and 18 percent more for electricity than that good-for-nothing layabout nephew in Austin.

So even though people in Dallas have the privilege of choosing their own electric provider -- if navigating the arcane, often intentionally misleading pricing plans can be considered a privilege -- they won't be able to alter the stubborn truth that putting electricity in the hands of three separate companies, each with an eye toward producing a return for its shareholders, will be more expensive than a publicly controlled entity ultimately beholden to the taxpayer.

Nor is there any realistic hope to change the system. Deregulation certainly won't be rolled back, and if it were ever seriously proposed that Dallas supply its own electricity, you can bet the industry would have local politicians pinned to the mat in an eye-blink.

Send your story tips to the author, Eric Nicholson.

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84 comments
DerpDudeTX
DerpDudeTX

Loving my CoServ in regulated Denton County. 8.5 cents / kWh. Suckers!

Metroplexual
Metroplexual

Sorry for the double post, I tried to edit out errors on one but both made it on.

Metroplexual
Metroplexual

In the good old days our electricity was provided by a regulated quasi private chartered utility company.  There was a built in or guaranteed profit margin for the utility companies and a reliable dividend source of income for investors. Everyone was happy (or should have been).  Customers received good service at a reasonable price, utilities were assured a profit, their employees were compensated well and they were a good investment for pensioners and other investor needing an income producing investment.


Then shareholders (I assume larger institutional shareholders) and top executives got greedy and wanted more.  They wanted to get into the telephone business, internet service and other businesses that were outside their charter.  They wanted to be free to spend their excess cash on growing their business beyond the limits of their charter and focus on share value and trading income rather than on their core business of providing energy to the homes and businesses in their area.


What could go wrong?  It was creating shareholder value yada yada.They lobbied and convinced the legislature to deregulate them and set them free to discover new sources of income instead of new power generating enterprises.


Now we have this. I can't complain about my own service but I have to check my bills very carefully.  These, like the phone companies are big prestigious enterprises, Fortune 500 companies full of professional, educated employees. However they go to market like carnival barkers, deceitful,tricky and well practiced. 


When the Bells broke up I used to ask their phone solicitors what the cost per minute of long distance would be and what taxes and other fees would be added to my bill.

I just wanted to figure out what my monthly cost would be to fairly compare providers and budget for the expense. None of them could provide that. They offered myriad plans none of which offered all benefits / services I was seeking.  It was and still is a sorry ass display of contempt for their customers.  I must admit it's better now but many still rely on slight of hand, deceitful practices.


Anyway, it's the world we live in and it's a "free market".  A company that wants to provide good service with clearly stated and reliable pricing may not be able to make it. They have to be like the other carnies in order to compete.  Try setting up a credit card processing service account sometime and you'll see it as an art.

Metroplexual
Metroplexual

In the good old days our electricity was provided by a regulated quasi private chartered utility company.  There was a built in or guaranteed profit margin for the utility companies and a reliable dividend source of income for investors. Everyone was happy (or should have been).  Customers received good service at a reasonable price, utilities were assured a profit, their employees were compensated well and they were a good investment for pensioners and other investor needing an income producing investment.


Then shareholders (I assume larger institutional shareholders) and top executives got greedy and wanted more.  They wanted to get into the telephone business, internet service and other businesses that ware outside their charter.  They wanted to be free to spend their excess cash on growing their business beyond the limits of their charter and focus on share value and trading income rather than on their core

business of providing energy to the homes and businesses in their area.

What could go wrong?  It was creating shareholder value yada yada.

They lobbied and convinced the legislature to deregulate them and set them free to discover new sources of income instead of new power generating enterprises.


Now we have this. I can't complain about my own service but I have to check my bills very carefully.  These, like the phone companies are big prestigious enterprises, Fortune 500 companies full of professional, educated employees. However they go to market like carnival barkers, deceitful and tricky. 


When the Bells broke up I used to ask their phone solicitors what the cost per minute of long distance would be and what taxes and other fees would be added to my bill.


I just wanted to figure out what my monthly cost would be to fairly compare providers and budget. None of them could provide that. They offered myriad plans none of which offered all benefits / services I was seeking.  It was and still is a sorry ass display of contempt for their customers.  I must admit it's better now but many still rely on slight of hand, deceitful practices.


Anyway it's the world we live in and it's a "free market".  A company that wants to provide good service with clearly stated and reliable pricing may not be able to make it. They have to be like the other carnies in order to compete.  Try setting up a credit card processing service account sometime and you'll see it as an art.



MikeWestEast
MikeWestEast

I use Green Mountain and pay about same or less than before regulation.  If your rate is too high, get off your lazy behind and get another rate.  I think I'm variable rate and it is fine.  You just need to be a little smarter than a shaved ape, read a brochure, and manage your power use. 

Sarah
Sarah

And Municipally owned Lubbock, Denton, and Garland electric is higher than Dallas, Austin, or San Antonio. The municipality owned utilities should be WAY lower because those don't operate on profit.


I had a for-profit water utility until just about a year ago when the city took it over. My bill went from about 150 to 60 a month. 


So why are Austin and San Antonio relatively similar to the rates of TXU, Reliant, etc?


TheRuddSki
TheRuddSki topcommenter

@halldecker

..,there is no other industry, including the Mafia, where a stated and promised rate... prominently advertised, isn't REALLY that..

Except for cell phones, cable TV, cars, hotel rooms, air flight...

halldecker
halldecker

Confirmation that Big Bucks keep greasing the lines,  there is no other industry,  including the Mafia,  where a stated and promised rate (8.whatever cents per kwh),  prominently advertised,  isn't REALLY that,  no, it doesn't include delivery charges,  bird-shit detectors,  sun ray-ray beam deflectors,   private jet expenses,  commissions paid to in-house electric washers,  etc.,  which run the bill up to 12-plus-plus.  Sometimes 13.


How do you actually learn what electricity costs?


Sign an annual contract with a hefty penalty clause and wait to see what your 8 cent per kwh adds up to.


Gotcha,  sucker!!


Q returns to,    who lets them suck us dry?



dingo
dingo

Texas average residential monthly consumption 1,168 kwh

http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3

San Antonio 1000 kwh June 2014 Bill:$110.50

13 of the 28 of the available Dallas area plans, 'for the same month and same amount of usage' are lower than $110.50.

Austin 1000 kwh June 2014 Bill:$118.18

20 of the 28 of the available Dallas area plans, 'for the same month and same amount of usage' are lower than $118.18.

So, what's up with that, Mister Man?

TheRuddSki
TheRuddSki topcommenter

Ten bucks a month more. Outrageous.

scottindallas
scottindallas topcommenter

@MikeWestEast you';re flatly wrong.  Green Mountain isn't green, nor is it a good deal.  You're paying above market rates for Green Mountain.  And, on average all Texans have paid $4500 more for deregulation than our regulated markets.  But, you're easily fooled by "free market" claims, even though electricity is a "utility" something distinct from a free market, legally, and economically


scottindallas
scottindallas topcommenter

@Sarah non-sense statement.  There IS no "Dallas" rate.  Bye bye

fordamist
fordamist

@TheRuddSki cricket has voluntary flat-rates,  I pay exactly $25 for POTS, plain old telephone service, all taxes, fees, etc., included. (other flat rates I found super-low for non-old-fart phones,  as their saleswoman phrased it).

Phones regulated by the PUC. See original story.

Leaving cable tv,  car rentals, hotel rooms,  all regulated by local governments. Locals set the tax rates,  all kinds of little extras. See original story.

I'm Exxon,  I advertise $3.29 a gallon,  except,  that doesn't include transport, refinery,  cost of an occasional blownup pipeline,  mega-carriers hijacked for movie production,  etc.,  which adds up to another 78-cents a gallon,  but you won't be told till after you buy what the total is.  I'd go to jail.

Well,  not if I'm Exxon,  certainly,  but you get the idea ...

My Q is,  why is this allowed? 

I know the answer,  I just want somebody else to get in the spirit.

ScottsMerkin
ScottsMerkin topcommenter

@TheRuddSki Sorry holmes there is a specific law on air flight.  The full fare total including all the little taxes the US government makes the airlines collect are listed right there.  Now Hotels, fuck them, my last my room had a mini bar, I didnt touch it, but at checkout there was a mini bar fee, just for it being in the fucking room.  

scottindallas
scottindallas topcommenter

@dingo there are a myriad of other fees added to many plans, not all, and not stated beforehand.  Why should we waste ANY time shopping plans?  It's a utility, there's no difference in the electrons, and they're sent through Oncor's (monopoly) powerlines.  And, the company (the customer service organization) has no connection to the producers.  It's a false market, not a free market

halldecker
halldecker

@dingo I'll tell you one thing that's wrong.  I learned only after signing up,  the 8.XX% I got from GEXA was valid only if I used over 2,000kwh a month.  Less than that,  well,  it's 11-point something. "Oh,  that wasn't made clear to you?"

I wrote the PUC,  asking why it was encouraging massive unneeded use to get the 'discount' at 2,000 hours,   they must not have had a form letter,  didn't hear back.

Q for you,  dingo,  what was the hourly rate the plans were advertised at,  what were they delivered at?


I'm actually interested,   not merely asking for argument.


Thanks.



halldecker
halldecker

@TheRuddSki You assume the numbers are those actually charged.   Based on my experiences,  I'll almost guarantee they're before 'add-ons',  'up-charges',  'cost recoupment',   etc.,  are added.


It's a deceptive trade practice,   folks,  you never get the rate that's advertised.


There is no place to get the actual info before you buy.


Don't suggest the PUC,   I stopped looking for tits on a boar hog when I was about 7.  Finally realized it was futile,  despite what Uncle Toots told me.



Anon.
Anon.

How many residential electric utility bills in the state are serviced by investor owned electric utility companies? Multiply that by $120.00 per year. That's why it is outrageous. I don't have the numbers for all of that, but let's guess that with 26,500,000 people in the state, that there are on average four people per household. Assume that number of households have electric bills. Assume 80% of that number are in the deregulated market and not serviced by municipalities or co-ops. Multiply that number by $120.00 per year.

That's a big number. Especially when Oncor has such a problem with outages. That very big number is why the legislature won't make any substantive changes.

fred.garvin.mp.713
fred.garvin.mp.713

But deregulation was supposed to lower prices. Instead, we pay more than than the municipal-owned utilities, and why pay just $10 more when we should be saving money.

MikeWestEast
MikeWestEast

@scottindallas @MikeWestEast  I guess I'd like to know how you know more about my bill than I do plus previous usage patterns, but I will just surmise that you are clueless as usual, justifying your pasted in diatribe.

Mervis
Mervis

@fordamist Yup. MetroPCS $46 per month. The taxes are in there but that is the cost they advertise and you pay.

TheRuddSki
TheRuddSki topcommenter

@fordamist

Why is all this lying and misrepresentation allowed?

Because everyone does it. I can get a BMW 5-series for just $200/month, ya know.

TheRuddSki
TheRuddSki topcommenter

@ScottsMerkin

Sorry holmes there is a specific law on air flight.

I plead ignorance, haven't flown post-9/11, what do I know of air fares?

As for mini-bars, I carry my own.

Sotiredofitall
Sotiredofitall topcommenter

@ScottsMerkin @TheRuddSki Yep; travel regularly and hotels have become the latest "screw you" business model.  Never understood how WiFi is now free at most any random business but hotels still get away with charging extra.

dingo
dingo

@scottindallas @dingo 

Do whatever you want. Like you said it's a free market.

I did whatever the hell I wanted and compared rates. Was it complicated? Yes, if you consider doing long division complicated.

The numbers I quoted above were from the actual amount used and the actual bottom line on the bill after all of your 'Myriad of fees'. 

I call bullshit on your 'not stated'. If it is not stated then it is not included. Its a farcking contract. Just like any other contract. If you have to read through five minutes of bullshit and fire up one or two neurons to understand what is stated to save hundreds per year then you are not wasting time comparing plans.

dingo
dingo

@halldecker @dingo 

'Q for you,  dingo,  what was the hourly rate the plans were advertised at,  what were they delivered at?'

I don't know. If you are trying to make a point with anecdotal evidence then fine:

I use Spark Energy and my last bill adjusted  back down from 1395 kwh actually consumed to 1000 kwh indicates that I am paying roughly $97.60 per 1000 kwh with no gimmick adjustments or other nonsense.


So myself personally am saving over all of the regulated communities linked to in the article except for San Marcos ($96 per kwh).

ScottsMerkin
ScottsMerkin topcommenter

@halldecker @dingo THIS, the rate is often "based on" 2000wkh used and is an average rate.  Use less pay more, yeah that makes total sense.  The highest users should be paying the highest rates.  

TheRuddSki
TheRuddSki topcommenter

@halldecker

All relative. The .11/kWh plan and the .10/kWh plan all have the same fees, etc.

TheRuddSki
TheRuddSki topcommenter

@TPFKAP

I'm only concerned with consumer cost, I hope TXU makes money, I think I own some stock in Energy Future Holdings.

Im trying to compare states, but can't find straight kWh cost comparisons. I know in Arlington I paid between 11 and 13 cents per, as I recall, with TXU.

TheRuddSki
TheRuddSki topcommenter

I don't think utilities should be deregulated, actually, but a ten dollar diff average doesn't seem excessive, if I'm reading these figures correctly.

scottindallas
scottindallas topcommenter

@fred.garvin.mp.713 And, we're facing brownouts.  Under regulated utilities, we knew the market (unlike free markets) can project and plan for that.  But, that's all gone, cause shortages are more profitable.  Another reason utilities are not like free markets.  Reduce supply, increase price/revenue. 

riconnel8
riconnel8

@fred.garvin.mp.713 after deregulation my bill DOUBLED.  After all those promises of deregulation being less expensive for us.  Go figure.  I'm now watching closely to see what they'll do with water. 

TheRuddSki
TheRuddSki topcommenter

@fred.garvin

According to mav's chart, the three states I've paid into over the past 5 years per kWh are

12.08 regulated

10.14 regulated

12.12 deregulated (Texas)

No big deal.

scottindallas
scottindallas topcommenter

@MikeWestEast @scottindallas Dude, our base wholesale rate is higher than what we were paying.  There are multiple studies with this info.  You just don't remember. 

scottindallas
scottindallas topcommenter

@dingo @scottindallas They are allowed certain fees, and in fact, some are not posted.  There's one that is on some bills and not on others.  I'd steer you to Ed Wallace's show today on 570 from 8am-1pm.  He regularly reports on these issues.  At least look at his webpage, which simply posts news stories related to cars, industry and the DFW/Texas economy. www.insideautomotive.com


ScottsMerkin
ScottsMerkin topcommenter

@dingo His point is that when you see 8.xx advertised the actual is probably coming in at 11.xx bc of the delivery charge.  My rate is 7.6 but after delivery charge it was 11.3 last month is was 11.6, I used less energy less month, so go figure I pay a higher rate for it

scottindallas
scottindallas topcommenter

@TheRuddSki No, they don't. Different companies have different charges, and different plans have different charges.  No shit.  That's why we have to regulate, the "market will bear" any price for electricity.  The economy is richer when utilities aren't a crapshoot, aren't a time waste, there's no difference in the utility service delivered....

mavdog
mavdog topcommenter

@TheRuddSki 

If you "own stock in Energy Future Holdings" you would be not happy about it, they went BK in April. Likely the stockholders- they were privately held btw, TPG and KKR were the buyout guys- are not going to come out of this with much left of their investment. TXU loses money, and the regulated transmission part is to be auctioned off (they are guaranted to make a profit).

Im trying to compare states, but can't find straight kWh cost comparisons

http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

scottindallas
scottindallas topcommenter

@TheRuddSki it's more than that, the prices advertised are rent with fees, taxes and charges not faced under regulated pricing

scottindallas
scottindallas topcommenter

@TheRuddSki lies, in Texas we never paid over 8 cents for regulated electricity.  ERCOT's own projections that prices should drop and supply would be abundant before deregulation.  We never got that, and you're a fucking clown RuddSki.  You ignore the Magna Carta, Common Law, and economics in ignoring that utilities are distinct from free markets

TheRuddSki
TheRuddSki topcommenter

@ScottsMerkin

My Mini-bar is actually any store near my hotel that carries Shiner Bock. I'm a lightweight these days.

Mini-bars are the payday-loan version of booze.

Mervis
Mervis

@ScottsMerkin @dingo My base rate is .075. Fully loaded bill that I just paid was .0784.They are trying to renew me at .088

Montemalone
Montemalone topcommenter

@mavdog @TheRuddSki

But TPG and KKR paid their principals shitloads of money to make that bad deal. Those guys did great.

It's the poor schleps that invested their money with TPG and KKR that are stuck.

TheRuddSki
TheRuddSki topcommenter

@mavdog

Then it's likely I own no stock in the company, my broker, who didn't avoid the brown acid, is pretty good.

Thanks for the chart.

Funny TXU story. I used to produce a lot of the crap folks get with their bill, and when I got a notice of a 10% rate hike, I dropped an email to let them know of my 10% freelance rate hike. They fired me. Whoops.

TheCredibleHulk
TheCredibleHulk topcommenter

@TheRuddSki

Fortunately, little ole Spoetzl brewery is pumping out enough product to fill beer coolers all around the nation these days.

ScottsMerkin
ScottsMerkin topcommenter

@Mervis @ScottsMerkin @dingo funny, I just got a renewal online from TXU when I logged in, they want to take me from a 12 month plan to a 24 month plan @ 12.9.  no way, Im changing companies in October

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