Study shows Xcel Energy pricing is below state average
The price gap between Texas’ competitive and non-competitive energy areas is shrinking, but Xcel Energy rates remain lower than the statewide average.
A Texas Coalition for Affordable Power study found energy prices have risen in single-provider areas over the last 10 years while dropping in the 85 percent of the state that is deregulated. Residential power is still about 1.8 cents per kilowatt-hour more expensive in deregulated markets than in the Texas Panhandle, down from a 6.5 cents per kilowatt-hour difference in 2006.
Deregulated areas comprise most of Texas outside of the Panhandle, South Plains and certain cities such as El Paso and Austin. They allow energy companies to vie for customers’ business in a free market overseen by the Electric Reliability Council of Texas, or ERCOT.
The annual TCAP study found deregulated customers would have saved $26 billion by living in single-provider areas from 2006-2015. Residential bills in deregulated markets decreased by 17.4 percent between 2006-2015 while increasing in deregulation-exempt areas by 5.5 percent.
Higher bills from Xcel Energy, which has a monopoly on Panhandle homes and powers most area businesses, are a result of costly technological upgrades, spokesman Wes Reeves said. The average residential bill has increased 19.8 percent per kilowatt-hour since 2006.
Fluctuations in fuel pricing, particularly natural gas, typically impact deregulated energy providers more heavily than single-provider zones. ERCOT providers often enter contracts to use a certain amount of a particular fuel, while non-deregulated enterprises like Xcel own multiple fuel sources and can adjust usage to fit price changes.
“No one can predict the future exactly, but we can predict some stability in our energy costs through some of the things we’re doing,” Reeves said. “I don’t believe we’re as exposed to that as they would be.”
Despite deregulated rates creeping downward and regulated markets shooting up, TCAP analyst and report author R.A. Dyer said a point of intersection was no sure bet.