Lower Business Costs With Texas Power Prices

Before you can truly understand the deregulation issues in Texas, its important know that the state is ranked 11th in the world when it comes to its consumption. There has always been a debate between state politicians as to what the best approach would be to the rising energy costs. The only thing they could come up with was a deregulation law.

What this does is allow customers in the state of Texas to choose their electricity service provider. In the beginning this new law brought excitement and change to each city, and about 85% of the commercial customers switched their providers at least once. Then of course residential changes hit around 40%. These are quite astounding numbers, and it’s hard to believe it took this long to make the change.

It was a crazy start, but one that most people felt needed to happen. Then all of the sudden several new companies surfaced, which led people to believe the prices would fall tremendously.

Oddly though, prices began to rise once deregulation was embraced by customers. It was so detrimental to the public, the electricity costs increased by over 40% in a three-year span between 2002 and 2004. The end result was residential homeowners and commercial business feeling treated as a result.

Proponents of deregulation tried desperately to explain the situation. They claimed that electricity prices were increasing because energy costs for natural gas, an important power plant fuel, had reached an all time high. In fact, in the same period that electricity prices had gone up by 40 percent, natural gas prices had gone up by more than 60 percent, which means that deregulation actually ended up saving customers money.

Then of course they had to deal with the biggest issues consumers were complaining about; the lack of immediate savings. It left the majority of the state feeling skeptical about what was really going on. It looked like we were all being sold a false bill by politicians and legislators.

In the end, supporters and economists ended up being right. When the natural gas industry started to decline and stabilized, the electricity bills around the state began to decrease. This revelation eventually brought about a decrease of 30% by the summer of 2008 through the winter of 2009.

Keep in mind, there are many experts out there attributing to this decline through the combination of the recession and the decline in natural gas costs. Eventually we expect the prices to keep falling the further into a recession we go.

It’s an up and down battle that will continue to be monitored throughout. However, for businesses owners it has become a huge help. Since many of them have to cut prices during these economic times, the lower electricity costs have kept their businesses afloat. Definitely an advantage for commercial companies anyways.