More Signs Pointing to Imminent EFH/TXU Bankruptcy

Per the Wall Street Journal, Energy Future Holdings (parent company to TXU, Oncor, and Luminant)  formerly known as TXU Corp., has hired restructuring lawyers at Kirkland & Ellis LLP, according to people familiar to the matter. Speculation about the financial woes of Energy Future Holdings has been rampant for years now, and I’ve written about their financial status myself, as well as what might happen to the Texas electricity market if TXU goes bankrupt. Well, it looks like the next domino in this process is about to fall, and Texans should be aware of what this potentially means to them as customers.  Continue reading “More Signs Pointing to Imminent EFH/TXU Bankruptcy” »

ERCOT Price Market Cap Changes Appear Politically Motivated

I’ve written before about the potential crisis in Texas due to the lack of new generation plants. Basically, not many new energy generation plants are being built, or even planned, at a time when Texas’s population continues to explode and our electricity needs along with it. The problem is that because of the deregulated electricity system, all new plants must be built by private investors instead of by taxing customers or raising electric rates. And right now the low cost of natural gas and the lack of guaranteed profits have investors leery of risking the construction of new plants in Texas.

A commonly referenced solution Continue reading “ERCOT Price Market Cap Changes Appear Politically Motivated” »

Who is The Texas Coalition for Affordable Power (TCAP)?

Anyone who visits my blog regularly has probably seen that I’ve been talking a lot about the Texas Coalition for Affordable Power (TCAP) lately. TCAP recently published their “history” of deregulated electricity in the state of Texas, and there are several things about their self-proclaimed history I find questionable, which I’ve documented at great length in the four posts below: Continue reading “Who is The Texas Coalition for Affordable Power (TCAP)?” »

Texas Electricity, TCAP, and a Biased “History” – Part Three

When I last left off on my critique of TCAP’s “history” of deregulated electricity in Texas, I was moving one by one through their “major findings” section of the document and giving my thoughts and raising questions about their facts and claims. I’m about half of the way through their findings, so without further ado lets jump right in.

Continue reading “Texas Electricity, TCAP, and a Biased “History” – Part Three” »

Deregulated Texas Electricity Bills are Cheaper than Entergy Texas Bills

Recharge Texas is back to their usual tricks and painting deregulated electricity in Texas in a negative light. Even worse is they have managed to wrangle a position blogging for the Houston Chronicle’s Fuel Fix blog, which I’m concerned will give them further false credibility.

Anyway, Recharge Texas is once again claiming that Texans are paying more in deregulated areas than they in regulated areas. The problem with this argument is that the numbers they use to support their theory are supplied by the United States Energy Information Administration (EIA).

Now, don’t misunderstand me, there’s nothing incorrect about the EIA’s numbers, other than they’re typically 2 years old at any given the time. The problem is that the EIA can only compare average regulated electricity rates to average deregulated electricity rates wholesale. What that means is that deregulated averages must include all of the people who don’t shop for electricity, don’t leverage the market choices to their financial advantage, and the people who still don’t know or understand they have electric choice.

Believe it or not, almost half of Texans in deregulated areas are paying as much as 50% more than the competitive market rates for electricity. Because of this the EIA information is a poor source for comparison because it skews deregulated rates high. Recharge Texas then uses these inflated numbers to make a blanket statement that deregulated electricity is more expensive than in regulated areas. When the fact of the matter is that deregulated electricity rates are substantially cheaper in deregulated areas for people who actually shop and compare.

Basically Recharge Texas is painting all of deregulation in a bad light simply because some people choose to pay a premium or don’t take advantage of the deals available. It is the equivalent of saying the price of food is more expensive in Texas than elsewhere because everyone chooses to shop exclusively at Whole Foods or Central Market, or that purchasing cars in Texas is more expensive because everyone purposefully chooses to pay sticker price without haggling.

Why am I bringing this up when the title of this post is discussing Entergy bills? Well, I stumbled across this article, and it is yet another example of a regulated utility about to raise rates. In this instance, the rates to be raised are already substantially higher than deregulated rates. In the month of October, the average bill for a customer with Entergy that used 1,000 kWh of electricity was $114.69.

For comparison, and you will have to take my word for it because it required me to do a lot of math, the average electricity bill in October for all the deregulated areas of Texas was $103.89 cents. And this includes all of the inflated bills from people who pay 50% over market prices. Entergy is ALREADY almost $11 more expensive compared to deregulated areas. If you add $14 to Entergy’s bill, it would be more than $24 higher than the monthly average in deregulated areas of Texas. If Entergy only gets half of what they’re asking for, it is still more expensive than all of deregulated Texas by about $18.

Other regulated areas more expensive than the average cost of the deregulated areas of Texas include El Paso and Victoria. And I’ll also include Austin considering Austin Energy is 250 million dollars in debt because they have refused to raise rates in well over a decade. They’ll be more expensive than deregulated areas very shortly while still be sporting a quarter billion dollar debt.

So chalk up Entergy, which services a massive chunk of East Texas customers, as another regulated area with massively higher bills than areas with deregulated Texas electricity. And that is even with all the high bills from indifferent shoppers that inflate the picture of deregulation. What would those numbers look like if everyone exercised electric choice?

When To Buy Electricity in Texas – 2011/2012 Edition

One of the most common questions most people ask is when to shop for Texas electricity. In fact, I’ve written about this topic before. Normally, my previous advice would apply any year, and for the most part it still does: Shop during the winter months when the rates are lowest and lock into long term plans with stable rates so you won’t be surprised by any huge bills. That is still the case, but I wanted to revisit the topic of the best time to shop because of a couple of new factors that will unquestionably effect our electricity rates…both in the short term, as well as potentially in the long term.

As I’m sure anyone who has been living in Texas is aware, we had a record setting drought and heat wave this past summer. Almost a month of consecutive days over 100 degrees, multiple threats of rolling blackouts and soaring electricity prices. Now, the soaring electricity prices and the high bills were the effect, and the cause was not having enough energy generation resources to meet demand because of the high temperatures.

Energy generation resources (coal plants, natural gas plants) are likely to continue to be a problem. With the looming EPA changes taking some of the existing resources offline, next summer could be even more grim than this past summer. Additionally, I’ve also spoken about and linked several articles recently discussing how the current economic market is making it unlikely that any companies will be building any new energy generation plants in Texas in the near future despite the fact that the state desperately needs more of them.

So what does this have to do with shopping for electricity plans? Well, recently multiple companies have come forward in their projections saying that they expect Texas electricity rates to rise in the near future. They highlight a scarcity of energy generation assets as well as companies that might attempt to recoup their losses from our sweltering summer (which I have also discussed previously) as reasons for the likely rate increaes. The parent companies for Reliant, TXU, Dynowatt, StarTex Power and more have all posted serious losses that they have attributed directly to the previous Texas summer weather.

The short of it is, that while there is no question that winter is the best time to shop for electricity plans, customers might really want to start keeping an eye on the marketplace RIGHT NOW. There’s reason to believe that the Texas electric rates are going to go up in the very near future, and probably for a long time to come. To that end, it might really behoove Texans to consider locking into long term plans that will last through the summer now, as opposed to waiting for January or February to start shopping. I can’t say when the rates will start going up for certain, but I can definitely advise people to keep an eye on the market prices and lock in a long term plan as soon as they start moving. Also, I’ve always been a proponent of 12 month fixed plans. Considering the state of the market, I’d actually consider more people start taking a look at 24 month fixed plans as well.

Anyway, I hope this post motivates people to keep an eye on the market prices moving forward.

Texas Electricity and the New EPA Changes

I’m sure that anyone who’s been keeping an even casual eye on the news cycles the past few weeks have seen a number of articles written about the new EPA changes and how they will effect our Texas electricity market. The act that has been pushed through the EPA by our current administration is called the “Cross-State Air Pollution Rule.” You can read a number of articles attacking it from different angles here, here, and here. There’s a lot to wade through in regards to the different accusations and concerns flying out there about this new ruling, as well as a lot of anger and vitriol. I’m going to skip that, however. I just want to take a look at the plan, as well as how it could potentially effect the retail Texas electricity market.

First off, lets take a quick look at what the plan is, and why it is going to effect deregulated electricity in Texas. The rule is designed to lessen certain kinds of emissions, lessening air pollution, specifically the kind of pollution that will float into and contaminate the air of other states that didn’t produce the pollution. In terms of a practical description, the plan is attacking the emissions that are produced by coal burning plants, of which Texas has many.

Why do the coal plants matter for our electric rates? We all know that a bulk of our electricity plants are natural gas plants, as well as the fact that the cost of natural gas is what sets electricity prices for the market. So why should the coal plants matter? Well, the first answer is that while those things dominate the market and set the rates, it doesn’t mean that the coal plants aren’t an important part of that product. If these plants get shut down (not all of them will, but many might) that means a larger burden has to be carried by the remaining plants. Or if the plants have to be fitted with expensive technology to lessen emissions, then that cost will translate into higher energy prices from the coal plants. Less plants carrying a heavier burden will also mean higher electric rates. This will all translate into higher prices for Texas electricity customers.

And that’s not all. The biggest issue that ERCOT has with this situation is that removing these coal plants will cut heavily into the minimum amount of electricity needed in the grid to consistently keep up with demand. This should be especially fresh in the minds of Texans considering the issues we’ve had recently. Just this past winter the entire state had do deal with huge rolling blackouts because of a demand shortage due to historic cold freezes which took several electric generation plants offline. The rolling outages kept people from suffering without energy too long, but the truth of the matter is that the grid didn’t have enough electricity to meet with demand. Additionally, there’s been several shorter blackouts all over Texas because the historic drought has upped the demand for electricity to the point the grid is having trouble meeting demand. And this is happening without any specific plants being offline or broken. So things are pretty tight right now. Imagine what would happen if we lost the use of several of our plants permanently? Naturally ERCOT is concerned that this new EPA law will seriously harm our ability to meet general electricity demand for the entire state. And any shortage in demand also will contribute to higher prices. And right now, Texas has the lowest energy prices in the United States.

Another big facet that is enraging people over this issue is the potential loss of jobs, as well as the accusation that Texas wasn’t given enough notice before landing on this list for states that had to adopt this new law. But none of that will directly tie into this stuff in regards to Texas electricity. The other points I’ve discussed, however, will have a heavy effect on our market moving forward. So that is what people should know about how the EPA will effect Texas electricity.

Market Rates: Abilene Electricity & AEP North 5/26

Good afternoon, everyone. Our shopping guide entry today for Texas Electricity focuses on the North Texas region, which is serviced by the AEP North TDSP. This includes the prices for Abilene electricity and San Angelo electricity. Compared to Houston and Dallas, the electricity rates in this region are much more expensive for month to month electricity plans, but their long term fixed rate plans are actually reasonable and affordable. And while I’m almost always a proponent of locking in low electricity rates, it makes even more sense in areas like North Texas where volatile month to month rates are already priced at a high premium. The list below also includes both month to month electricity plans along with long term fixed electricity plans. It’s a good place for Texans to start their shopping process.

Month to Month Electricity Plans:

  • Kinetic Energy – 6.6
  • Reliant Energy – 6.7
  • StarTex Power – 6.9
  • Bounce Energy – 7.0
  • Frontier Utilities – 7.1
  • Dynowatt – 7.3
  • Month to Month Green Electricity Plans:

  • Kinetic Energy – 7.5
  • Bounce Energy – 7.6
  • Reliant Energy – 7.6
  • Dynowatt – 7.8
  • Southwest Power & Light – 7.9
  • YEP – 8.0
  • Texas Power – 8.0
  • Long Term Fixed Rate Electricity Plans:

  • Southwest Power & Light – 6 Month Fixed Plan – 8.3
  • Reliant Energy – 6 Month Fixed Plan – 8.4
  • YEP – 6 Month Fixed Plan – 8.4
  • Amigo Energy – 12 Month Fixed Plan – 8.7
  • Kinetic Energy – 12 Month Fixed Plan – 8.7
  • Southwest Power & Light – 12 Month Fixed Plan – 8.8
  • APNA Energy – 12 Month Fixed Plan – 8.8
  • Amigo Energy – 24 Month Fixed Plan – 8.9
  • Tara Energy – 24 Month Fixed Plan – 9.1
  • Kinetic Energy – 24 Month Fixed Plan – 9.4
  • Long Term Fixed Rate Green Electricity Plans:

  • Kinetic Energy – 6 Month Fixed Plan – 8.8
  • Reliant Energy – 6 Month Fixed Plan – 8.9
  • Southwest Power & Light – 6 Month Fixed Plan – 8.9
  • Kinetic Energy – 12 Month Fixed Plan – 8.8
  • Tara Energy – 12 Month Fixed Plan – 8.9
  • Southwest Power & Light – 12 Month Fixed Plan – 8.9
  • Tara Energy – 24 Month Fixed Plan – 9.1
  • Kinetic Energy – 24 Month Fixed Plan – 9.7
  • Southwest Power & Light – 24 Month Fixed Plan – 10.2
  • Cities covered in this shopping guide: Abilene electricity; Alpine electricity; San Angelo electricity; Vernon electricity.

    Market Rates: West Texas & Lewisville 5/20

    Good afternoon, everyone. Today marks our last shopping guide entry this for Texas electricity. Today’s service area is the Texas-New Mexico power footprint, which covers electricity in Lewisville and many other service pockets all over Texas. The electricity rates in this region are between the rates for Houston and Dallas, so while not the most expensive in Texas, it’s still important to understand the price floor and find a good deal to help you save money. Below are the most commonly ordered types of electricity plans with the cheapest electricity prices for the service area. It is a good place to start shopping.

    Month to Month Electricity Plans:

  • Kinetic Energy – 6.3
  • Reliant Energy – 6.4
  • StarTex Power – 6.6
  • Dynowatt – 6.6
  • Frontier Utilities – 6.7
  • Bounce Energy – 6.9
  • Month to Month Green Electricity Plans:

  • Kinetic Energy – 7.0
  • Dynowatt - 7.1
  • Bounce Energy – 7.4
  • Reliant Energy – 7.4
  • Southwest Power & Light – 7.5
  • YEP – 7.6
  • Long Term Fixed Rate Electricity Plans:

  • Southwest Power & Light – 6 Month Fixed Plan – 8.3
  • Reliant Energy – 6 Month Fixed Plan – 8.3
  • YEP – 6 Month Fixed Plan – 8.4
  • Southwest Power & Light – 12 Month Fixed Plan – 8.5
  • Reliant Energy – 12 Month Fixed Plan – 8.5
  • Kinetic Energy – 12 Month Fixed Plan – 8.6
  • Tara Energy – 24 Month Fixed Plan – 9.0
  • Amigo Energy – 24 Month Fixed Plan – 9.2
  • Southwest Power & Light – 24 Month Fixed Plan – 9.2
  • Long Term Fixed Rate Green Electricity Plans:

  • Southwest Power & Light – 6 Month Fixed Plan – 8.7
  • Reliant Energy – 6 Month Fixed Plan – 8.7
  • YEP – 6 Month Fixed Plan – 8.8
  • Kinetic Energy – 12 Month Fixed Plan – 8.7
  • Tara Energy – 12 Month Fixed Plan – 8.7
  • Southwest Power & Light – 12 Month Fixed Plan
  • Kinetic Energy – 24 Month Fixed Plan – 9.5
  • Tara Energy – 24 Month Fixed Plan – 9.6
  • Southwest Power & Light – 24 Month Fixed Plan – 9.7
  • Cities covered in this shopping guide: Lewisville electricity.

    Market Rates: North Texas & Abilene Electricity 5/19

    Good afternoon, folks. Here is today’s Texas electricity shopping guide, this one reviewing the electric rates for North Texas (AEP North). This coverage area includes electricity in Abilene and electricity in San Angelo. It’s important to keep in mind that electricity prices for this region are expensive, so switching electricity providers is a good way to keep your bills low and save money. This shopping guide is a great place for consumers to start that process.

    Month to Month Electricity Plans:

  • Kinetic Energy – 6.6
  • Reliant Energy – 6.7
  • StarTex Power – 6.9
  • Bounce Energy – 7.0
  • Frontier Utilities – 7.1
  • Southwest Power & Light – 7.4
  • Month to Month Green Electricity Plans:

  • Kinetic Energy – 7.5
  • Reliant Energy – 7.6
  • Bounce Energy – 7.6
  • Southwest Power & Light – 7.9
  • YEP – 8.0
  • Dynowatt – 8.0
  • Texas Power – 8.0
  • Long Term Fixed Rate Electricity Plans:

  • Southwest Power & Light – 6 Month Fixed Plan – 8.3
  • YEP – 6 Month Fixed Plan – 8.4
  • Reliant Energy – 6 Month Fixed Plan – 8.4
  • Kinetic Energy – 12 Month Fixed Plan – 8.7
  • Amigo Energy – 12 Month Fixed Plan – 8.7
  • APNA Energy – 12 Month Fixed Plan – 8.8
  • Amigo Energy - 24 Month Fixed Plan – 8.9
  • Tara Energy – 24 Month Fixed Plan – 9.1
  • Kinetic Energy – 24 Month Fixed Plan – 9.4
  • Long Term Fixed Rate Green Electricity Plans:

  • Kinetic Energy – 6 Month Fixed Plan – 8.9
  • Southwest Power & Light – 6 Month Fixed Plan – 8.9
  • Reliant Energy – 6 Month Fixed Plan – 8.9
  • Kinetic Energy – 12 Month Fixed Plan – 8.8
  • Tara Energy – 12 Month Fixed Plan – 8.9
  • Southwest Power & Light – 12 Month Fixed Plan – 9.0
  • Tara Energy – 24 Month Fixed Plan – 9.1
  • Kinetic Energy – 24 Month Fixed Plan – 9.7
  • Southwest Power & Light – 24 Month Fixed Plan – 10.2
  • Cities covered in this shopping guide: Abilene electricity; Alpine electricity; San Angelo electricity; Vernon electricity.