New reports show Texans pay more for electricity, but less satisfied with service

Consumers in Houston and Dallas continue paying some of the highest electric bills in the nation, according to a new survey by an online comparison shopping firm.

The company, Whitefence.com, reports on its website that Houstonians paid average electric bills of $215.68 in July 2009. That’s higher than what residential electric customers paid in every other American city surveyed that month by the company. Dallas, the only other Texas city listed, had the third highest bills.

And neither are the high bills simply a function of the hot Texas summers, according to the survey data. For instance, residents in sweltering hot Las Vegas and Phoenix still paid much less for electricity than residents in Houston and Dallas. Residents in Houston and Dallas also paid more for electricity than did residents in all the other surveyed cities during the relatively cool months of February and March.

“These survey results confirm what Texans in deregulated areas of the state have known for a long time — that they continue paying too much for power,” said Geoffrey Gay, general counsel for a coalition of municipal electric consumers. Gay noted that Texans paid electric rates below the national average before electric deregulation, but since deregulation have consistently paid above the national average.

A separate report from J.D. Power and Associates also shows that Texans are less satisfied with their residential electric services than they were just one year ago. “Driving this overall decline is decreased satisfaction with pricing,” J. D. Power said in the report, which was released Aug. 20th.

The well known marketing firm collected for its analysis customer data as it relates to pricing, billing, communications and customer service. It found that customer satisfaction had dropped “notably” since 2008.

-- R.A. Dyer

Windfall profits under Cap and Trade

Texas consumers may end up paying another billion dollars each year as a consequence of federal cap-and-trade legislation according to a new report.

Sponsored by a coalition of utility commissioners and consumer groups, the report also warns of higher "unproductive" costs from the legislation because a single price sets all spot prices in deregulated wholesale markets. That means there could be an uptick in price for power from all sorts of generators -- even those that emit little or no greenhouse gases -- according to the report.

"In deregulated markets, it is likely that any allowance allocation will result in consumer-funded windfall profits for certain generating plant owners, at least in the early years," noted the study, drafted on behalf of the National Association of Regulatory Utility Commissioners, the American Public Power Association and other groups.

The report added that granting free cap-and-trade credits would increase windfall profits in both regulated and deregulated markets. A provision for granting free allowances to transmission companies was ushered into the House version of the bill at the urging of utility lobbyists, according to media accounts.

The incremental cost to consumers in the ERCOT region could run anywhere from $848 million to $3.3 billion per year, depending on the final language of the legislation. The report's authors stressed, however, that it is not their position that greenhouse gas legislation is prohibitively expensive, nor that its costs would likely exceed its benefits.

An earlier analysis conducted by ERCOT noted that a typical monthly electric bill could increase by $27 as a consequence of proposed climate change legislation.

-- R.A. Dyer