Energy and Environment Reporting for Texas

Who’s Getting The Best Deals On Electricity In Texas?

Climate Change And Global Pollution To Be Discussed At Copenhagen Summit

Photo by Jeff J Mitchell/Getty Images

During a meeting of the Texas Public Utility Commission, its former chairman, Barry Smitherman, gave Texans one more reason to love their state and for others to envy it: low, low prices for electricity.

“If you use the best available price in the market place from a retail electric provider Houston and Dallas have the lowest prices of any big city in America. I think we have to be very mindful of the competitive advantage this gives us here in Texas,” Smitherman said at the PUC meeting.

Strictly speaking, Smitherman might be right: the price of electricity is relatively low. But if you think that means people in Houston and Dallas have the lowest electricity bills, you’d be wrong. The reality is exactly the opposite because Texans use so much electricity.

For several years now, national comparisons using data reported to the federal government and from other sources show people in Houston and Dallas — and in Texas overall — pay some of the highest electricity bills in the country. According to the U.S. Energy Department, “The average annual electricity cost per Texas household is $1,801, among the highest in the nation; the cost is similar to other warm weather states like Florida, according to EIA’s Residential Energy Consumption Survey.”

But drilling deeper into the data, what you pay depends on where you live in Texas.

“We’re about 10 cents per kilowatt hour,” said Paula Gold-Williams, Executive vice president at CPS Energy. CPS Energy is owned by the City of San Antonio. It’s a non-profit company.

“We never are chasing the earnings per share, the quarterly result, that sometimes other businesses have to go after,” Gold-Williams told News 88.7.

CPS sells electricity to San Antonio residents at a price that is 10 to 20 percent cheaper than average advertised rates in Dallas and Houston. In those big cities electricity is sold through dozens of for-profit marketers. It’s a de-regulated system developed by the Texas legislature over a decade ago.

The original idea was that competition would mean lower prices. But a few cities — San Antonio, Austin, and San Marcos among them — did not join the system. In those cities, everyone has to buy their electricity from one, city-owned utility.

In San Antonio, CPS owns its own power plants and has no contracts, no credit requirements, no flexible rate plans.

“So our pricing is simple and straightforward,” said Gold-Williams.

And that’s one of the reasons critics say the de-regulated system should be overhauled to be more like San Antonio’s.

“From where I sit, any changes would be a long shot. A lot of people who are in power right now are very happy with this arrangement,” said Carol Biedrzycki, executive director of the Texas Ratepayers’ Organization to Save Energy.


  • jaksemas

    This article is written from the perspective of an end-user. The fact of the matter is, all power plants compete in the de-regulated market; Austin (Austin Energy) & San Antonio (CPS) included. It’s the de-regulated REP market where an end-user can select a provider. & all you are selecting is who sends you your bill… Many of the REP’s don’t own power plants & are just third-party biller. So it’s easy to understand why those bills are more.

  • Jim

    This article looks only at the electricity rate, but our bills are based upon more than the rate. A major factor that they did not consider is the monthly user fees. Cities that run their own utility end up charging huge monthly fees, so that their rates look good in comparison but we still pay more. Govts deceive!

  • R.A Dyer

    Drilling further into the data, the Texas Coalition for Affordable Power has found that average residential prices in deregulated areas of the state have been consistently higher than average prices in areas of the state exempt from deregulation. This trend began with the very first year of deregulation and has continued ever since. The TCAP analysis looked at “all-in” prices — that is, it included fees, taxes, etc. in its review — and so avoids objections that the comparisons are not conducted in an apples-to-apples fashion. The good news is that after many years of above-the-national average prices, residential prices in deregulated areas of Texas dipped below the national average in 2012. Average prices in areas of Texas exempt from deregulation consistently have been below the national average.

  • R.A Dyer

    The Texas Coalition for Affordable Power analysis, referenced in a separate comment, can be found here:

  • AECT

    AECT (www.aect.net) represents investor-owned electric companies in Texas. We certainly agree that the price of electricity in Texas is relatively low, but we’d like to weigh in on two important points. First, customers in competitive areas can choose among an array of products to meet their needs, including low prices. According to the PUC’s Power to Choose website, customers can choose 12-month fixed plans with prices that are right in line with the municipal rates cited in the story. Current offers are as low as 8.6 cents/kWh in the Houston area, and as low as 7.4 cents /kWh in other parts of the state. And these low prices aren’t anomalies — the average 12-month fixed price offer for the state is 10.8c/kWh.

    Second, it’s important to understand there are two factors to a bill: the price per kilowatt hour, and the amount of electricity used. Retail electric providers in competitive areas deliver a wide array of innovative solutions to help customers understand and manage their usage. And customers have another option to lower electric bills — simply shopping for a plan that best meets their needs, whether it’s low prices, flexible terms, or a plan that supports renewable forms of electric generation.

About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »