Even though customers in deregulated Texas markets routinely pay more for electricity, there is a bright spot. The gap between the average price paid for electricity between deregulated and regulated market has shrunk to 8.8 percent. In 2006, customers in deregulated cities were paying nearly 47 percent more for electricity than their counterparts in regulated cities.
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Partha Krishnamurthy, a marketing professor at the University of Houston, said he suspects that many people may be unaware they’re paying more than they need to for electricity, putting their bills on autopay and forgetting about the rates they pay. Most people don’t go to the trouble of changing banks, jobs or their electricity providers, for that matter, unless there are problems.
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“The whole business model of the industry is to get people in on the promotional rates and then jack up their rate when the promotional rates end,” said Trent Crow, a former JP Morgan energy trader and founder of Real Simple Energy, a website that helps consumers find low-cost electricity plans. “I don’t think people realize how much they are overpaying.”
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That means that customers in Houston paid an average of $5,500 more for electricity over a 14-year time span beginning in 2002, according to the group that buys electricity on behalf of municipal governments in Texas. The calculation, which uses data from the U.S. Energy Information Administration, assumes monthly electricity use of 1,300 kilowatt hours.
If you live in the greater Houston area, there are over 60 different energy suppliers competing for your business. Many of these providers have websites that are confusing and difficult to navigate, their rates buried in misleading advertising and dense jargon. Who has the time to sort through and keep track of options across all these different sites?
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