Texas sees lower electricity rates along with concerns about future reliability

The energy industry in Texas has undergone a dramatic and largely positive transformation in the decade plus since it introduced electricity deregulation.

In recent years, a greater number of electricity providers has begun offering services in Texas, increasing competition in electricity prices.

The San Marcos Mercury reports that, combined with lower prices for the natural gas that provides much of the state’s power, electricity rates in Texas had fallen 2 percent from the year before by September of 2011 and as much as 15 percent from the recent high point in 2008.

The problem for the state, ironically, is that these lower electricity rates have led many companies not to invest in new generation capacity, leaving open the possibility that there could be service interruptions and rate hikes in coming years.

Yet, electricity deregulation offers businesses and residents the ability to avoid some of the worst of this shift by finding electricity providers with fixed rates that last for at least two years. This could help customers avoid the worst of potential rate increases.

The Public Utility Commission of Texas reports that as of September 2011 only 56.58 percent of residents had switched electricity providers.