retail update - july 2015

55

Compe;;ve Retail Electric Market in ERCOT

56

The ERCOT Compe;;ve Retail Electric Market is Providing Strong Customer Benefits

Key Takeaways

–  Price offers are substan;ally lower than prices available just before compe;;on began, especially when adjusted for infla;on

–  Texas’ na;onal electric price ranking has improved since the market opened in 2001

–  Every compe;;ve area in ERCOT has variable and 1-‐year lock offers available that are far lower than the na;onal average price and nearly all state averages

–  Among states like Texas that depend heavily on natural gas for power genera;on, Texas prices compare favorably, with even lower prices available to those in the compe;;ve market

–  The ERCOT market provides efficient market prices that track natural gas prices

57

Service Area Average Fixed-

Price Offer (12-month term)

Lowest Fixed-Price Offer

(12-month term)

Lowest Price Offer

Available

Dec. 2001 prices, not adjusted for

inflation

Dec. 2001 prices, adjusted for inflation

AEP Texas Central

10.1¢/kWh 5.7¢/kWh 5.6¢/kWh 9.6¢/kWh 12.9¢/kWh

AEP Texas North


CenterPoint Energy


Oncor


TNMP


Lower Prices Available Today than Before Compe;;on Began

Sources: PUC Historical Data, Bureau of Labor Sta;s;cs -‐ Consumer Price Index (34.7% infla;on since December 2001), www.powertochoose.org offers as of July 1, 2015

July 2015 December 2001

58

Texas’ Na;onal Price Ranking Has Improved Since 2001

0 2 4 6 8

10 12 14 16 18 20 22

WA

LA

WV

K

Y

AR

N

D

TN

OR

N

E

OK

U

T M

T W

Y

SD

N

C

ID

IN

FL

VA

GA

MO

C

O

TX

AL

MS

IA

N

M

MN

A

Z S

C

KS

O

H

DC

IL

N

V

MD

PA

M

I D

E

WI

NJ

ME

C

A VT

NY

R

I N

H

AK

M

A CT HI

0

2

4

6

8

10

12

14

16

18

KY WA ID WV

OR TN ND NE UT

WY

MT IN MO AL OK

MS

SD CO

MN KS MD SC AR GA

DC VA WI

LA NC MI

AZ

OH IA FL DE IL NM TX NV PA NJ CT

CA AK RI

MA

NH VT

ME

NY HI

Source: EIA average annual residen;al rates for 2001 and May 2015 monthly data (latest available informa;on). Average lowest available price from powertochoose.org Web site as of May 1, 2015 for a residen;al customer using an average of 1,000 kWh per month.

¢/kW

h ¢/kW

h

2001 State Ranking (Pre-‐CompeLLon)

May 2015 State Ranking (Latest Available) Average lowest 12-‐

month fixed price offer in compeLLve market in

May 2015: 5.6¢/kWh

59 Sources: Dec 2001 electric rates: Public U;lity Commission of Texas; May 2015 electric rates: Power to Choose; Average Residen;al Electricity: U.S. Energy Informa;on Administra;on (Dec 2001 and May 2015; All other data: U.S. Bureau of Labor Sta;s;cs

Gallon of Gas 145%

Dozen Eggs 112%

Ground Beef 99%

Ground Coffee 62%

Hourly Legal Services 57%

U.S. Average Residen;al Electricity 56%

Loaf of White Bread 46%

Houston-‐Galveston Rent 44%

Dallas-‐Fort Worth Rent 30%

Gallon of Milk 17%

ERCOT Average Lowest Fixed Price Offer -‐44%

ERCOT Average Lowest Available Offer -‐44%

Price Change: December 2001 to May 2015

Electric Price Offers Compared With Other Retail Products

60

0"

2"

4"

6"

8"

10"

12"

14"

16"

18"

20"

LOWEST"DFW

"PRICE

"LO

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"4"1"YR

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ICE"

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LOWEST"HOUSTON"PRICE

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ICE"

LOWEST"ABILENE"PR

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LOWEST"CO

RPUS"CH

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"Washington"

Louisiana"

West"V

irginia"

Kentucky"

Arkansas"

North"Dakota"

Tenn

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Oregon"

Neb

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Oklahom

a"Utah"

Mon

tana"

Wyoming"

South"Dakota"

North"Carolina"

Idaho"

Indiana"

Florida"

Virginia"

Geo

rgia"

Missouri"

Colorado

"Texas"(Statewide)"

Alabama"

Mississippi"

Iowa"

New

"Mexico"

Minne

sota"

Arizona"

South"Carolina"

Kansas"

Ohio"

US"AV

ERAG

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f"Colum

bia"

Illinois"

Nevada"

Maryland"

Penn

sylvania"

Michigan"

Delaw

are"

Wisconsin"

New

"Jersey"

Maine

"California"

Verm

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New

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aii"

CENTS&PER

&KWH&

RESIDENTIAL"RETAIL"ELECTRICITY"PRICES"

All&Data&from&May&2015&

Na;onal&Average&

Every Compe;;ve Area in ERCOT Has Variable and 1-‐Year Lock Offers Available that are Lower than the Na;onal Average Price

Sources: PowerToChoose.org offers as of May 1, 2015 U.S. Energy Informa+on Administra+on, latest available data

61

Texas Market Compares Favorably to Other States U;lizing Natural Gas as the Primary Genera;on Source

Sources: Energy Informa+on Administra+on (data as of May 2015); EIA natural gas-‐intensive states; powertochoose.org as of May 1, 2015

Note: Texas statewide average price includes prices from both compeLLve and regulated areas of the state.

0.00

5.00

10.00

15.00

20.00

25.00

MA AK RI NY CA ME NV MS TX FL LA

¢/

kWh

Average Residential Electric Price Among Natural Gas-

Intensive States !May!2015!(Latest!Available!Consistent!Data)!

Average Lowest Available 12-‐Month Fixed Price Offer in ERCOT

Compe;;ve Market (May 2015): 5.6¢/kWh

62

Prices Rising Na;onwide; Compe;;ve Offer Prices Falling in Texas

-20

0

20

40

60

80

100

TX C

ompe

titive

TX

ME

FL

Na

tura

l Gas

Sta

tes LA

NY

CA

DE

MA

NV

CT

AR

NJ

WA VT

NC

Re

stru

ctur

ed S

tate

s DC

NH

US

(-TX

) CO

RI

PA

MT

AK

HI

IL

TN

IA

MS

AL

MD

OR

W

I VA

GA

MI

SC

OH

MN

NM

UT

KY

AZ

IN

SD

W

Y OK

W

V ND

NE

KS

MO

ID

Residential Price Changes (%) - Jan 2007 - May 2015 ResidenLal Price Change (%) – Jan 2007 to May 2015

Texas 0%

Gas-‐Dependent States (excl. TX)

9%

US Average (excl. TX)

32%

Lowest CompeLLve Offer Prices in Texas

-‐53%

Restructured States

(excl. TX) 31%

Sources: Energy Informa+on Administra+on (data as of May 2015); EIA natural gas-‐intensive states and restructured states; powertochoose.org as of May 1, 2015

63

Protec;ons in the Market for Retail Customers

•  Make Spanish-‐language support available to customers •  Place customer deposits in interest-‐bearing accounts

and return that interest to customers when the deposit is returned

•  Follow a mandated ;meline for disconnec;on of customers

•  Provide no;ce in case of disconnec;on •  Inves;gate any customer complaint within 21 days •  Provide a Terms of Service Statement detailing contract

terms, cancella;on penal;es, deposit requirements, fees, payment arrangement op;ons, how to cancel service, and other obliga;ons of the REP

•  Allow a customer to cancel a service agreement within three federal business days afer receiving the terms of service

•  Allow a customer to cancel the switch upon receiving no;fica;on that the switch will occur

•  Register with the PUC and meet financial requirements set by the Commission

•  Communicate clearly with consumers regarding no;ce of contract expira;on

•  Demonstrate creditworthiness to purchase power to serve its customers

•  Demonstrate the technical ability to supply electricity •  Maintain privacy of customer informa;on •  Not discriminate among customers

•  Not add charges to a customer’s electric bill for services not requested by the customer

•  Provide a “Your Rights as a Customer” disclosure •  Provide an Electricity Facts Label to allow for an

“apples-‐to-‐apples” comparison among REPs •  Make deferred payment plans available for those

expressing an inability to pay

•  Provide the LITE-‐UP discount for low-‐income Texans during summer months

Among other requirements, REPs serving residen;al customers must:

Even this brief sampling of regula;ons highlights that customers are protected

retail update - july 2015

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