The old cliche that “everything is bigger in Texas” seems to apply to energy choices too.
Texas is deregulated, meaning most residents there have choice in energy providers — more than 130 different retail electric companies to be exact, according to the Public Utilities Commission of Texas.
The Texas energy choice market is unique but complicated. Some experts say it brings strong competition, lower prices and a wide variety of plans and unique billing options. Others believe Texas is “deregulation on steroids” — meaning too many options and consumers can be inundated by choices leading to paying more for electricity.
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“The complaints are usually about the clunkiness, the complexity, the sheer amount of choices,” said Michael Kraten, director of accounting program initiatives at University of Houston’s C.T. Bauer College of Business. “It’s the same people who complain when they walk into a cookie aisle in a store. They say, ‘I just want a package of Oreos,’ and they find five dozen different options and no clear way to compare between them. It’s a valid complaint. Yet, there is a valid reason for why the options are there.”
While both arguments may be true, if you live in Texas or run a business there, the fact is, you have no choice but to make a choice in energy providers.
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Comparing business and residential electric rate in Texas
In a deregulated energy market, consumers can choose who provides the energy that powers their homes or businesses. While you’re still locked into a utility in deregulated markets, theoretically the amount of energy providers competing for your business could lead to getting a better deal, although consumers must do their homework or risk paying more, as mentioned above.
According to the latest available data from the U.S. Energy Information Administration (EIA), the average Texas commercial electricity rate is 8.85 cents per kilowatt-hour, lower than the national average of 12.39 cents per kWh. In comparison, the average Texas residential electricity rate is 14.58 cents per kWh, also lower than the national average of 15.73 cents per kWh.
The reasons why Texans enjoy lower rates is clear: Unlike in many states that aonly llow a single utility to sell energy, the Lone Star State sees energy businesses competing for consumers. That means savings for consumers. Of course, it also means bad actors who may take advantage of consumers who don’t read the fine print. As businesses typically consume more power than homeowners, savvy business owners and executives could use their leverage to work out better deals.
Businesses and commercial properties can avoid overpaying for energy with a customized rate plan that is tailored to your property’s usage profile. Start saving on your utility costs today with a free commercial energy consultation.
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Why are electric rates for business lower than residential rates?
Because businesses typically consume more power than homes, there are too many factors at play to allow them to shop for rates online. Use this inquiry form to get connected to a business or commercial energy specialist for a free rate quote.
