California’s electricity was deregulated too
But I thought prices were supposed to go down because of deregulation?
Star-Telegram | 12/28/2006 | Power costs may slow development
What chafes the North Texans are the lower rates in Austin and San Antonio, whose municipal systems were exempted from the 1999 deregulation law. Austin and San Antonio have emerged as direct competitors to Dallas-Fort Worth in industrial relocations, a point driven home three years ago when Toyota selected San Antonio for a big new car plant.
As North Texans have paid 13 to 15 cents per kilowatt-hour for electricity this year, San Antonio’s average rate was 9.5 cents and Austin’s was slightly above 10 cents.
Both systems, being government-owned, don’t have to pay taxes and can sell tax-exempt debt.
Municipal systems and rural co-operatives have always enjoyed a price advantage because of their tax-exempt status. But the coalition complained in its report that recent increases in North Texas by TXU and its competitors have widened the disparity.
Spare me the comparison between municipal and competitive rates. It makes it sound like North Texas would have competitive rates if only they didn’t have to compete against unfair municipal companies. Well it sounds like that competition within it’s own area hasn’t benefited consumers either.
AP Wire | 12/30/2006 | Electricity market nearing milestone, but will consumers benefit?
On Jan. 1, the state drops its “price to beat,” allowing electricity giants such as TXU Corp. and Reliant Energy to adjust their basic rates up or down as they see fit, without getting approval from state regulators.
Power companies call it a key step forward for consumers, who should benefit from market shifts downward and by shopping around for cheaper electricity.
Consumer advocates, however, say prices are already too high and complain that Texans pay some of the highest rates in the country.
Household electric bills have actually gone up, not down, in the early stages of competition, and they see little sign of any real savings once the regulated price disappears.
And if TXU, Reliant Energy, and others don’t have the ability to sell tax-exempt debt and have to pay taxes, they do have the ability to contribute to political campaigns to get their power plants built. TXU has contributed over $300,000 to date to Texas campaigns. The CEO, Erle Nye, has personally contributed over $200,000 to campaigns. I guess CPS Energy CEO, Milton Lee, didn’t have an extra $200,000 to donate from his $300,000 salary. And TXU can’t be doing too badly if it’s CEO is getting another four million dollars on top of his one million dollar a year base pay.
Want to make a bet? I bet that if the San Antonio market was forced open for competition, the TXU CEO’s compensation package would increase as would the cost of electricity in San Antonio but TXU rate payers wouldn’t receive any benefit. Their rates would probably go up to pay for the CEO’s raise and dividend payments for improving TXU’s infrastructure to keep it competitive.
Technorati Tags: Electricity, deregulation, ERCOT, municipal electrical companies, consumers, Texas, TXU, ERCOT, Erle Nye, CPS Energy, CPS, Milton Lee, Open Markets
Filed under: CPS, CPS Energy, ERCOT, Electricity, Erle Nye, Milton Lee, TXU, deregulation, texas
ERCOT is not to blame, ERCOT follows the protocols written by the utilities that were approved by the PUCT. Nothing like letting the fox watch the hen house Eh! In 2000, my KwH rate with TXU was 7.4, Today my KwH rate with TXU is 18.5, now ask yourself this, who is watching out for the consumers in Texas, obviously not the PUCT, looks to me the PUCT is looking out for the big utilities. The City Electric Utilities mentioned are called Non-OPT in Entities or NOIES. The market was set up from the conseption to protect certin utilities and force competition on others. The theroy was to reduce KwH rates in the state, but as else where deregulation has spawned, the rate payer suffers from huge increases. The power produced is from the same sources, the power is tranmitted over the same power lines and distributed through the same distribution grid. The only thing that really changes is where you recieve your bill from and place several layers in between Generator and consumer.
Unbelievable. So it looks like the only “added value” from TXU is it’s marketing and bill processing system. This could be seen as a sad reflection of the entire corporate philosophy in United States.