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.
The new business startup was crazy considering any way you turned, there was a new company coming out of the woodwork. The competition was so fluent; the idea was that there would be much lower prices. The good news was this was offered through both residential and commercial areas.
The problem was it didn't work like most people believed. In fact, it completely went in the opposite direction raising prices over 40%. This occurred during a 3 year span between 2002 and 2004. This left consumers in the state feeling mistreated.
Due to all the dismay, proponents of deregulation tried to explain the situation as best they can. The first answer revolved around natural gas. After all, during the same time these prices increased by nearly 60%. The way they figured it was that it was still going to save Texans money in the long run.
The biggest issue that they tried to confront head-on was the misconception of immediate savings due to the vast amount of competition. While this was going on, there were several individuals still remaining skeptical about the situation. It was almost as if they were being sold a false bill by politicians and legislators.
What it came down to is the economists and supporters of deregulation were right. Once we were able to stabilize the natural gas arena, electricity bills in Texas eventually started falling. By the summer of 2008 through the winter of 2009, these prices decreased by 30%.
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. - 29939
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.
The new business startup was crazy considering any way you turned, there was a new company coming out of the woodwork. The competition was so fluent; the idea was that there would be much lower prices. The good news was this was offered through both residential and commercial areas.
The problem was it didn't work like most people believed. In fact, it completely went in the opposite direction raising prices over 40%. This occurred during a 3 year span between 2002 and 2004. This left consumers in the state feeling mistreated.
Due to all the dismay, proponents of deregulation tried to explain the situation as best they can. The first answer revolved around natural gas. After all, during the same time these prices increased by nearly 60%. The way they figured it was that it was still going to save Texans money in the long run.
The biggest issue that they tried to confront head-on was the misconception of immediate savings due to the vast amount of competition. While this was going on, there were several individuals still remaining skeptical about the situation. It was almost as if they were being sold a false bill by politicians and legislators.
What it came down to is the economists and supporters of deregulation were right. Once we were able to stabilize the natural gas arena, electricity bills in Texas eventually started falling. By the summer of 2008 through the winter of 2009, these prices decreased by 30%.
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. - 29939
About the Author:
About the author: Jerry Dyess has written about the Electricity business for the past 7 years. Get more information on Business Electric rates.
