Deregulation in Houston Texas News
The Chinese Grocery store in Houston Texas serves a diverse crowd of mostly asian people from many different cultures. This grocery store has several freezers, boilers, air conditioning units, lights and ballasts. The energy and electricity used in this store caused some of the managers there to begin asking what they could do to save in electricity costs. Knowing that a lower electricity bill goes right to the bottom line it makes since for a manager to pursue what could be an easy way to add to this.
When Texas deregulated in 2002 they waited to see what would happen. Not seeing evidence of a huge savings among companies in their area they continued to stay with their electricity provider they have always had. Electricity Deregulation in Texas was new to them and until they began to hear some type of buzz about this new deregulation process and its benefits they were not interested in looking into it further. This is similar to how many companies pursued looking into the potential electricity savings available simply by switching companies.
An interesting thing about the way Texas deregulated the electricity market was in the "price-to-beat" the state government established. All prior monopolistic retail electric providers were mandated to charge this set electric price which is regulated by the PUC. This then allowed multiple new Retail Electric Providers to come into the market and set up shop. Some were start-ups by people who had a little knowledge about energy trading, laws and regulations. Often times these up-starts had just enough information to cause more harm then good. Occasionally a new up-start was able to stay in for the long haul and by 2007 they are now firmly footed in the industry. Other Retail Electric companies came from out of state and have such a large presence there that they had the capital investment needed to market their electricity product and be a formidable presence among the other Retail Electricity Providers in Texas.
This new idea of a price-to-beat worked. Texas electric companies began to compete with each other and the price continued to drop while the prior established Retail Electric Providers known as the incumbents had to charge a set rate and not go below that rate. This price-to-beat has done exactly what they hoped it would do. It basically garnered competition in the market place and encouraged many Retail Electric Providers to open up shop in Texas and compete.
In the beginning of Texas deregulation, at times, the electric rates were rising higher then where they were prior to deregulation. This had nothing to do with deregulation failing but had to do with the market coincidentally having higher natural gas prices due to heat factor issues and natural gas storage reports reporting low amounts. On the other hand deregulation has failed the Residential Electricity market for the time being. Retail Electric Providers have been charging right under the price-to-beat incumbent electric providers. This has caused a failure among Residential Electric Price competition. This is likely to change since the price-to-beat was ended officially in January 2007. Look for Residential rates in Texas to continue to fall.
