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Proliferation Of Texas Retail Electric Offers

One of the benchmarks of a successful free market is the range of choice provided to customers. Choice can be viewed both in terms of the number of firms active in the market as well as the variety of products those firms offer to consumers. In the first decade of retail electric deregulation in Texas, the market has experienced dramatic changes in both metrics.

Electricity Providers and Plans

EOY 2002EOY 2012
REPs Serving Residential CustomersNumber Of Products OfferedREPs Serving Residential CustomersNumber Of Products Offered
AEP TCC (CPL)7844251
AEP TNC (WTU)3340234

Sources: Scope of Competition in Electric Markets in Texas, Public Utility Comissions of Texas, Jan 2003 and Jan 2013

Electricity Plans

The interesting element in the table above is that the growth in the number of residential electricity providers, while impressive, is dwarfed by the growth in the number of plans they offer. In the first year of Texas retail electric competition, the ratio of products to suppliers was essentially 1:1. Ten years later in 2012, the ratio was almost 6:1. This reflects a classic free market response to consumer demand and competition.

While there will always be a demand for a low price, no frills 12-month fixed term product, it is difficult to get noticed in an increasingly crowded market without offering a more diverse array of products. The coming years will be to interesting to monitor to see if supplier consolidation and streamlining of product lines occur and change the competitive landscape.

About: Charlie Hewitt

Charlie Hewitt has more than 25 years of in-depth energy experience having served in executive and managerial roles at some of the largest retail energy providers in North America.His expertise covers a wide range of retail energy disciplines including pricing, contracting, risk management, and credit. He holds an MBA from UT Arlington, MA and BS degrees in geology from UT Austin, and was a TXU environmental research fellow.

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