Deregulation Produces Lower Business Electric Costs
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.
However, proponents of deregulation tried to explain the situation as best they could. The answer revolved around electricity prices rising due to natural gas obstacles. During this time the natural gas industry had reached an all time high and reached increases of 60%. So they were trying to tell us that deregulation was actually saving customers money.
Economist also lent credence to the claims of deregulation supporters when they maintained that increased competition would eventually lower prices as soon as energy prices stabilized. Customers remained skeptical. They felt as if they had been sold a false bill of good and that the politicians and legislators had not fulfilled their end of the bargain.
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%.
Many experts attribute this to the glut of natural gas in the state coupled with decreased energy demand due to the recession. Though Texas residents still have their fingers' crossed, many in the know expect prices to continue to fall as the recession intensifies and people use less natural gas.
These falling prices have been a great boon to businesses in Texas who have been forced to cut prices and tighten their in the midst of the worsening recession. In fact, many small business owners claim that lower electricity costs are at least partially responsible for helping them keep afloat.
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.
However, proponents of deregulation tried to explain the situation as best they could. The answer revolved around electricity prices rising due to natural gas obstacles. During this time the natural gas industry had reached an all time high and reached increases of 60%. So they were trying to tell us that deregulation was actually saving customers money.
Economist also lent credence to the claims of deregulation supporters when they maintained that increased competition would eventually lower prices as soon as energy prices stabilized. Customers remained skeptical. They felt as if they had been sold a false bill of good and that the politicians and legislators had not fulfilled their end of the bargain.
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%.
Many experts attribute this to the glut of natural gas in the state coupled with decreased energy demand due to the recession. Though Texas residents still have their fingers' crossed, many in the know expect prices to continue to fall as the recession intensifies and people use less natural gas.
These falling prices have been a great boon to businesses in Texas who have been forced to cut prices and tighten their in the midst of the worsening recession. In fact, many small business owners claim that lower electricity costs are at least partially responsible for helping them keep afloat.
About the Author:
Author: Jerry Dyess has been a manager in Electricity for the past 7 years. Get more information on Business Electric rates.
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