PROMOTIONS AND INCENTIVES....

Promotions within the market currently include offers for the REP to donate to charity for each new sign-up, retail gift cards, referral and bill credits, prepaid credit cards and online store credits.

Reward programs include anything from free companion airfare, a free month of electricity, cash back programs, and things of that nature.

Before choosing a REP offering these incentives, insure the rate price associated with the product selected is competitive at the low or near low end of the market.  Otherwise, you are paying for it....sometimes big time. 

Promotions, incentives and referral credits offered by various REPs to entice signup may have hidden agendas and pitfalls. Analyze and consider carefully.

USAGE LEVEL DETERMINES FINAL BILL....

Yes, the number of kWhs of electricity used for a given month affects total average price paid for that month.  Customers are generally charged different rates for the three common usage levels of 500, 1000 and 2000 kWh tiers.  This would not apply if your Facts Label specified a flat rate in lieu of tiers.

A tiered rate structure is utilized by the majority of providers.  A small number use flat rates.  Be fully aware of these facts when evaluating which rate plan product is best.  Folks, this is a key bit of advise.  Your pattern of usage matters.

OUR ELECTRIC BILL'S MOST IMPORTANT CONTENT ITEM....

"The average price you paid for electric service this month", expressed as a cents per kilowatt-hour amount rounded to the nearest one-tenth of one cent, is this new content item. 

This exact worded statement is now required for all residential and small business monthly electricity bill statements.  Find the statement and highlight the number.  Compare it to your kWh rate charge.  You may be surprised. 

Computation of the average price figure is standardized by the PUC and the rule is applicable to all REPS.  All costs for your service are included, less taxes.  This new rule is an outstanding consumer protection measure.  

WHAT IS A PROMO CODE AND WHAT IS ITS VALUE?....

In this retail market, promotional codes are sales marketing tactics generally employed by Consultants, Sales and Referral Agents and Website Portals to give the impression of a discount.

Don't be fooled.  A code differs from a true promotional offer or other incentive to secure your electricity account.

Often, searching through Power To Choose or dealing direct with the REP will result in the same or lower price quote or offer.  Dealing direct avoids commissions to the middlemen for little or no service in many cases.

Few, if any, consultants have succeeded in forming true aggregations of residential customers for the purpose of securing lower rates through negotiations with the REPs using the collective bargaining principle.

More on promotions and incentives in a later posting.

NRG ENERGY ACQUISITIONS

NRG first entered this retail market with the acquisition of Reliant Energy Services during the 2nd Qtr, 2009.  More recently, the Fortune 500 company has acquired Green Mountain Energy and Pennywise Power.

With Reliant positioning itself as a "full service" retailer, with a specific focus on smart energy products, and with Green Mountain Energy serving as NRG's pure play renewable retailer, Pennywise Power will be aimed at customers for whom cost is the "bottom line," NRG said.

Of course, Reliant is one of the original legacy providers.  Green Mountain has served the market since the start of deregulation in 2002.  Pennywise is a new startup having only begun operations this past November.

Currently, Pennywise serves only the customers in the CenterPoint service area.  This retail provider will be a distinct brand apart from Reliant Energy and will essentially operate as a discount or value retailer.

For learning more review these websites: NRG Energy; Reliant Energy Services; Green Mountain Energy; Pennywise Power. 

MOVE OUT OF THE SHADOW....

Yes, get involved and become engaged in the discourse.....please.  We must fight hard to battle the unfair practices already known and being disclosed continually.  Deregulation has moved millions, perhaps billions, of our dollars into the pockets of the new middlemen players. 

Residential customers are at the mercy of the open market as currently structured, unlike the other categories of customers.  The accounts of industrial, commercial and large business customers are treated differently.  Those customers pay less for their electricity.

DO YOU HAVE A SMART METER YET?....

If not, it's coming.  My home address is scheduled for installation during Feb/Mar/Apr 2012 time frame.  I am already paying $3.24 per month on my bill to defray the cost.

Your TDU/TDSP has complete information on smart meters and the deployment schedule.  Customers served by CenterPoint can CLICK HERE.

Almost everything you ever wanted to know about the new Advanced Metering System (AMI) is contained in the PUCT report to the 82nd Legislature released in September 2010.

LEGACY PROVIDERS VS NEW REPS....

As of mid-2010, legacy providers' standard rates were 12 to 57% higher than January 2002 prices, while the average, lowest competitive offers were slightly above $0.08 per kWh, which almost mirrored the rates in early 2002.

Savings of up to 35% relative to the legacy providers' standard rate were available for a typical residential customer using 1,000 kWh per month.  Competitive rates were even lower later in 2010.  

The most competitive offers in the Texas power market have decreased an average of 13.1% for fixed rates and 17.5% for variable rates, not adjusted for inflation, since the state opened its market to retail competition in 2002. 

Source of all above numbers is the 2011 Report to the 82nd Texas Legislature, Scope of Competition in Electric Markets in Texas.

What is highlighted is the benefit of choosing a non-legacy retail provider. What is not so impressive is the lack of more overall improvement in rates after eight years of deregulation.

TEXAS OFFICE OF PUBLIC UTILITY COUNSEL...

The Office of Public Utility Counsel (OPUC) was created by the Texas Legislature in 1983 in response to legislative and consumer group concerns that the residential and small business ratepayers were not being adequately represented in the utility proceedings that ultimately affected them.  Balance was needed in the regulatory process.

The mission of OPUC is to provide legal representation to Texas residential and small commercial telephone and electricity consumers in proceedings that come before the Public Utility Commission of Texas (PUC), the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC), and in state and federal courts to ensure that utility services are available to these ratepayers at just and reasonable rates in an increasingly competitive environment.

The staff is accessible to consumers through direct contact and through their website.  The use of voicemail is limited and all calls and contacts are immediately routed to the appropriate agency personnel, if possible. They strive to satisfy all consumer requests within 5 working days.

WHY TEXAS IS USING MORE COAL, WIND AND LESS GAS....

When Texans turn on their lights, run their air conditioning or plug in their iPads, they are getting an increasing amount of power from the wind — and from coal plants.

Figures released earlier this month show that last year, nearly 8 percent of the power on the state's electric grid was generated by wind. That's more than three times the national average.

And, because Texas recently added several coal-generating units, coal plants....for the first time in recent memory....produced more power than any other electricity source.  Nuclear power's contribution held about steady, at 13 percent of generation.

READ MORE OF THE INFORMATIVE ARTICLE PUBLISHED TODAY IN THE TEXAS TRIBUNE.

SNAPSHOT OF MARKET....

A review of Power To Choose (PTC) this date, January 23, 2011, reveals the low market for the CenterPoint service area for a 12 month plan remains at 8.7 cents per kWh.  Oncor area has a 7.9 low rate.

Five competing REPs were offering this 1000 kWh price.  Study of their EFLs (Facts Labels) revealed considerable differences in the offers that would result in much different average prices paid.

One REP's product was actually 8.42 cents with no monthly charges and acceptable tiering.  Another had a totally unacceptable tiered rate structure. 

Don't be mislead by the tricks used by the REPs.  An advertised low price on PTC is not always the best.

IF DEWHURST SHUTS DOWN OLD COAL, HE COULD SHUT OUT THE LIGHTS....

According to the Texas Energy Report and the Dallas Morning News, Lt. Gov. David Dewhurst told reporters last week he's considering incentives to get power companies to either upgrade or replace old coal plants with natural gas.  This was reported in an earlier posting.

Thirteen coal-fired power plants in Texas were built before 1980. Shut those down without immediately replacing the full capacity, and the lights go out.

The Electric Reliability Council of Texas, which operates the state grid, expects Texas will need 65,206 megawatts of electric generating capacity this summer to meet peak demand.  ERCOT predicts we will have 73,656 megawatts, giving the grid a fat, 16 percent cushion of excess capacity.  But if you remove those 13 plants, or 8,288 megawatts of capacity, you get a razor-thin reserve margin of only 0.2 percent.

The question is.  How real and severe would the impact of this action be on our electricity prices in the future.  COMMENTS INVITED....

WHAT'S UNIQUE ABOUT AUSTIN AND SAN ANTONIO?....

These cities own and operate their own electricity utility companies and continue to be regulated unlike the majority of us.  About one quarter of the state's geographic territory, including these cities, remains regulated. 

For the month of November 2010, residential customers in the cities of San Antonio and Austin paid winter rates of 80.94 and 91.20 cents per kWh, respectively.  The rate for another regulated city, San Marcos, was 90.36.

In my view, this is a clear indicator of the excessive profits built into our deregulated market.  These cities provide the service at these costs while generating added revenue for other uses.

PRICE TREND DATA....

The U.S. Energy Information Administration (EIA) provides a wealth of infomation which has been quoted in earlier postings and likely will continue to be shared with this audience periodically.  The data is both interesting and valuable. 

The chart provided here is contained in the Short-Term Energy Outlook section.  It depicts the past history and future forecasts relating to the nationwide average residential electricity price annual growth pattern.  Note the steady rise in prices during the past decade and the favorable forecasts for the next two years.  CLICK HERE TO SEE THE CHART.

ZONAL VS NODAL. WHAT DOES THAT MEAN....

Texas' top utility regulator thinks the Electric Reliability Council of Texas' new nodal market could have saved consumers "millions, if not hundreds of millions" if it had been in place during the 2008 energy price spike.

Barry Smitherman, Public Utility Commission of Texas chairman, made his observation during Tuesday's ERCOT board meeting.  LEARN MORE HERE.

HAVE A PLAN - JUST DO IT....

A complete plan of research and study for arriving at an informed decision on whether to renew or switch at contract expiration time is multi-faceted and will require work and time.  I know, some don't give a hoot, but that attitude is what must be changed.  Do your fellow man a service.  Savings equals pay for our sweat.

First, one must develop in their mind what type of rate plan product and term is preferred.  Factors to consider include variable, indexed or fixed; month to month, 3, 6, 9, 12, 18 or 24 months term; percentage of renewable energy; acceptance of paperless billing and auto-pay requirements; independent market evaluation; price trends of natural gas, and others.

Next, the usage history of the account for the past 12 months is almost essential to help evaluate tiered rate structure offers or to rule out this factor.  Remember, the industry generally assigns higher rates to lower usage while also assessing added charges.  Do the math.  Get this data from your own files or from your TDU.

Now, we must use PTC to select 2 or 3 tentative providers meeting the criteria preferred while searching out the lowest price offerings.  A greater number of customers choosing the lowest priced offers will collectively apply downward pressure to the market.  Yes, we can make a difference.  That is the premise of this whole drill.  The business model of the REPs is based on the assumption the public won't be responsible.  Let's beat them at their game.

Finally, Google the REP and see what you find.  Check complaint stats on PTC or with the BBB.  Check with friends and neighbors or extended family to learn what you can.  Call the REP and conduct a chat.  Be comfortable with your decision after taking these steps and after doing the homework. 

REP LICENSE AND CERTIFICATION INFO....

The PUCT maintains a Directory of Certificated Retail Electric Providers - REPs.  This directory includes all REPs that are currently certificated to do business in Texas.  Only those providers listed in this directory are considered active.

This directory includes the certificated company name (and dba, either active or historical, if different, and change of ownerships) and company information such as a physical/mailing address, telephone, fax, website, and email if available.  Authorized contact information will also be listed for each company.

This is a valuable resource for researching the REPS you are considering as your new provider. 

TXU ENERGY UNVEILS "FASTER, SMARTER, BETTER" WEBSITE

TXU Energy has announced the launch of a new website that will dramatically improve customers’ experiences with the company, according to their spokesman.  To see the new changes CLICK HERE.

By echoing this announcement, this Blog is not endorsing TXU for renewal of existing contracts or new switches.   The provider's market share must continue to be reduced so that competition can be enhanced.  TXU rates remain well above the current market lows.

NATURAL GAS SPOT REPORT....

During the report week (January 5-12, 2011), the Henry Hub spot price increased $0.03 to $4.55 per million Btu (MMBtu).

EIA has reported the projected Henry Hub natural gas spot price averages $4.02 per million Btu (MMBtu) for 2011, $0.37 per MMBtu lower than the 2010 average. It further expects the natural gas market to begin to tighten in 2012, with the Henry Hub spot price increasing to an average $4.50 per MMBtu.

EIA expects the higher forecast production during the first half of 2011 combined with a decline in consumption, to moderate natural gas spot prices. The projected spot price falls to a low of $3.73 per MMBtu in June then rises to $4.61 in December.

U.S. Electricity Retail Prices.  EIA expects the U.S. retail price for electricity, distributed to the residential sector, to increase only slightly above the 2010 average of 11.6 cents per kilowatt-hour by 0.6 percent in 2011 and by 1.0 percent in 2012.

WHICH CUSTOMERS HAVE SWITCHED THE MOST....

Switching rates vary by service area, with the highest rate of switching in the TNMP service area, at 66.89%, and the lowest rate in the Oncor service area, at 45.86%.  Oncor's is the only service area yet to achieve a 50% switching rate.  Oncor still has a majority share of the market.  THIS IS NOT GOOD.   Source: PUCT.

In our opinion, these numbers are less than stellar for an eight year old so-called, competitive market.  This issue is one of my focus items.  More switches to the new non-affiliated providers are needed.

SAY IT AIN’T SO….

The recent J.D. Power and Associates' Texas Residential Retail Electric Provider Customer Satisfaction Study shows that in 2010, 41% of customers have been with their current provider for at least three years, versus 49% in 2009, with slightly more than 10% "highly committed" to their REP and another 25% indicating they "definitely will" stay with their REP.

More than one-third of residential customers have no plans to switch providers under any circumstance. SAY IT AIN’T SO.  These attitudes and positions run counter to the promotion of competition in the marketplace. More common sense and reason is needed.   People, you can save money for yourself and help your neighbor, friend or relative. 

The above stats are contained in the PUC Chairman’s 2011 Report to the 82nd Texas Legislature, Scope of Competition in Electric Markets in Texas, and are highlighted as a positive development.  In my opinion, the numbers are unacceptable after eight years of deregulation implementation and directly reflect back on reduced funding for the state’s outreach and education program for “Texas Electric Choice“.

The Public Utility Commission of Texas (PUCT) budget for conduct of the Texas Electric Choice awareness campaign was set at $12 million dollars at the beginning of deregulation but was reduced to $750 thousand for the past six plus years. These funds are barely enough to operate the Power to Choose website and the associated telephone call center with minimal outreach to Texas electricity consumers.  Could this be the reason so many are underinformed?

THE WAY IT WAS....

Texans enjoyed electricity rates well below the national average for a number of years preceding deregulation.  For the period '95 to '02, average annual prices fluctuated between 7.7 and 8.1 cents per kWh for the eight years.  The system was cost plus then.  Deregulation has simply added a new layer for profit taking.  Yes, new jobs were created and that is good, but at the expense of Texas consumers.

After Texas restructured its market, prices have remained above the natural average until very recently.  As of September 2010, the latest data available, shows the average price for the residential sector to be 11.49 cents/kWh.  The U.S. average was 11.97.  The commercial and industrial sectors had average prices of 9.07 and 6.11 respectively.  Source: Energy Information Administration

We were promised lower rates after deregulation.  What went wrong?  Comments are invited.

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UNDERSTANDING YOUR BILL....

The content of our monthly electricity bills includes several elements that I want to point out for a greater understanding by all.  The PUC enacted some rule changes during 2010 standardizing this content.  My inquiries have proven a high percentage of homeowners haven't become aware of these facts.

Bill content basics include your account number with that provider; your unique 22 digit ESI number; meter number; service address; period of service; kWh rate, total usage for the month; and customer service telephone number.

I have found that many are unaware of two new key items.  First, is the contract expiration date if you are on a fixed term contract.  The second, and most important, is the statement of your total average cost of electricity for the month.  Computation of this figure by all REPs is now standardized and inclusive of all costs included in the bill, less taxes. 

It is essential to understand this total average cost for the billing period.  It is the only data element that affords "apples to apples" comparisons between the providers or bill senders.

I believe when we choose a retail electricity provider, we are basically choosing a bill sender considering the generation and distribution of our electricity remains regulated and unaffected.  Deregulation only affected the retail market. 

With the new rules and the not too old Oversight and Enforcement Division of the PUCT,  some might consider all REPs the same in many respects.  This statement will be explained in a following posting.

DEWHURST WILL PUSH TO REPLACE COAL PLANTS

Without delving into specifics, Lt. Gov. David Dewhurst said he plans to push for “regulatory and fiscal incentives” to encourage the operators of 1970s-era coal-fired generating plants to either retrofit or replace them with units that would run on natural gas.

Speaking with the reporters at his semi-annual press luncheon this past week, Dewhurst also said he’s exploring incentives that would encourage public and private fleets to convert to engines that burn compressed natural gas and liquefied natural gas.

The goal, he said, is to “use more domestic Texas energy” as a way of meeting federal clean air standards and to lessen Texas’ carbon footprint.

This report published on 13 January 2011 by John Moritz, Texas Energy Report.

SNAPSHOT OF MARKET - 15 JAN 2011....

My mid-month review of the shopping Website http://www.powertochoose.org/ lists price offers for ZIP Code 77379 as low as 6.9 cents per kilowatt hour (kWh) for a variable plan and as low as 7.7 cents per kWh for a 4 month fixed plan. These plans translate to a monthly electric bill of $69 and $77 for 1,000 kWhs.  Indexed rate plans began at 8.1 cents per kWh.

For the most common rate plan term of 12 months, those offers ranged from 8.7 to 12.2.  18 month plans ranged from 9.6 to 10.9 and finally, 24 month plans were 9.6 to 14.0. 

INDUSTRY TRADE ASSOCIATION LAUNCHES NEW WEBSITE....

Texas Competitive Power Advocates (TCPA), launched a newly redesigned website earlier this week to provide a comprehensive online resource for everyday Texans, industry experts and policy makers on the competitive electricity market.  Understand, this trade organization, being industry related, will usually side with the opposing view on the issues presented in this Blog.  Click here to visit the website.

ATMOS ENERGY EXECUTIVE SAYS NATURAL GAS PRICES HAVE STABILIZED....

Atmos Energy Corp. Chairman Bob Best expects natural gas prices have calmed down for the long-term, after years of riding a roller coaster.  Link to article published in Dallas Morning News has been disabled.

STILL AWAITING YOUR INTERACTION....

Please help spread the word about the worthy goal of this blog.  Did you know that you can share this Blogsite with others using Twitter, FaceBook or via email?  See the links at the end of all postings for those services.  More important, we want you to provide comments to the blog for others to see and read and to become followers and contributors. 

WIND POWER GROWING IN TEXAS....

Wind power continued as a growing force in electricity production in Texas in 2010, accounting for 7.8 percent of generation for the power grid operated by the Electric Reliability Council of Texas, which manages 85 percent of the state's electric load.  READ MORE HERE 

COAL FIRED GENERATION TAKES TOP SPOT....

Texans got the largest share of their electricity from coal last year, rather than natural gas. 

           Read Dallas Morning News article here.