TCCEA Analysis Shows Texas Electricity Rates Unchanged Over 10 Years

An analysis performed by the Texas Chamber of Commerce Energy Association using data supplied by the U.S. Energy Information Administration, shows that electricity rates in Texas for the first quarter of 2012 are almost exactly the same as Q1 2002 rates when adjusted for inflation.

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The cheap electricity rates in Texas are not all good news, however.

Dallas, Texas (PRWEB) July 29, 2012

An analysis by the Texas Chamber of Commerce Energy Association (TCCEA) shows that inflation adjusted electricity rates in Texas are unchanged since 2002. Data supplied by the U.S. Energy Information Administration (EIA), show that in the state of Texas electricity rates in the first quarter of 2012 are almost exactly the same as Q1 2002 rates when adjusted for inflation.

According to the EIA, Texas averaged 8.72 cents per kwh for electricity across all sectors in the first quarter of 2012. The sectors include residential, commercial, transportation, and industrial. The rate in Q1 2002 was 6.81 cents per kwh in 2002 dollars.

The 6.81 cents per kwh in 2002 equals to 8.70 cents in today’s dollars. These values are adjusted for inflation using the consumer price index (CPI) maintained by the Bureau of Labor Statistics. Over the same period the national average for electricity has risen around 8% even when adjusted for inflation.

Click to view table of inflation adjusted U.S. and Texas Electricity Rates.

Since 2002 the Texas electricity market has been deregulated, bringing electric choice to Texas. There has been a great deal of debate on the success of deregulation in Texas. In 2008 natural gas prices were extremely high compared to today’s prices. This along with an overheated economy helped to push rates in Texas to an average of 11.83 cents. Since then both the natural gas market and the economy have cooled off considerably, causing overall electric rates to drop. Some places like the residential electricity market in Dallas have experienced an even larger drop in rates.

The cheap electricity rates in Texas are not all good news, however. The low rates have helped bring about a dearth of private investment in the Texas electricity power grid. This has resulted in capacity concerns for Texas.

In response Texas electricity officials have raised the wholesale electricity rate cap with the goal of stimulating investment in new power plants. The combined impact of the higher wholesale electricity rate cap, along with continued economic recovery could likely mean higher electricity rates in 2013. Many consumers are hedging themselves by choosing longer term electricity plans, such as 24 month plans offered by various providers.

About TCCEA

TCCEA member chambers represent businesses of all sizes throughout the state of Texas. Using the negotiating leverage this provides TCCEA is able to obtain favorable electric rates for members. TCCEA is also a resource for news and information on the Texas electricity market. If your local chamber is not a member of TCCEA have your chamber leadership reach out to TCCEA.


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