Texas is scheduled to open its retail electric power markets to competition in January 2002. However, Texas' retail competition plan has already affected retail electricity prices by requiring that electric utilities freeze their base rates from September 1999 until retail competition begins.

• In the early 1990s, the nominal retail electricity prices—prices unadjusted for the effects of inflation—in Texas were increasing, reaching a high of 6.42 cents per kilowatthour (kWh) in 1994. Since 1995, nominal prices have been stable at slightly more than 6.0 cents per kWh (see graph).
  
  
• Because nominal prices did not increase more than inflation during the 1990s, real electricity prices—prices from which the effects of inflation are eliminated—remained stable through 1994, then decreased reaching 6.04 cents per kWh in 1999 (see graph).
  
  
• In 1999, industrial customers in Texas paid an average 3.97 cents per kWh while residential customers paid 7.55 cents per kWh (see map). These prices were relatively low compared to other States and compared to national averages. The 1999 national average retail electricity prices were 4.43 cents per kWh for industrial customers and 8.16 cents per kWh for residential customers.
  
  
• Future retail electricity prices in Texas will be influenced by two opposing factors. Under Texas' retail competition plan, residential and small commercial customers will receive a 6-percent rate reduction from the prices that were in effect January 1, 1999. The rate reduction lasts until January 1, 2007, at which time prices will be competitively established. On the other hand, industrial customers received no assurances of reduced rates. Also, under Texas' plan, rates for all customers are subject to fuel cost adjustments. Because a significant portion of plants in Texas is gas-fired, retail rates may go up if gas prices increase.
  
  

Related Websites

• Energy Information Administration, Monthly Energy Review (Table 7.5):
  http://www.eia.doe.gov/mer/elect.html
• Average Retail Prices of Electricity, 1960 - 2003 (Table 8.10)
• Energy Information Administration, State Electricity Profiles: http://www.eia.doe.gov/cneaf/electricity/st_profiles/texas.pdf
• Energy Information Administration, Electric Power Monthly (Tables 44-55): http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html
• Energy Information Administration, U.S. Average Monthly Bills by Sector, Census Division, and State (Table 1): http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html
• Energy Information Administration, Electricity Revenue, Sales and Price for Power Marketers (Tables C1-C4): http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html
• Energy Information Administration, Electricity Revenue, Sales, and Price by State and Utility: http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html