Tres Amigas Superstation Gets an Investor
January 4, 2012
As I’ve written before, the Tres Amigas Superstation which is being to constructed to connect America’s 3 major electricity grids is a great project. Well, the project recently received a 12 million dollar investment by Matsui, a Japanese company. Matsui will take an equity stake in the Tres Amigas.
This is great news because anything to stabilize and further the completion of the Tres Amigas plant is fantastic, in my opinion. To recap, the Tres Amigas plant will interconnect the 3 major electricity grids in the U.S.: the Texas electricity grid, the Eastern grid, and the Western grid. Right now Texas is almost completely cut off from the rest of the country. This makes it difficult to get additional power resources during times where there is an energy shortage. Perfect examples of this were last February’s cold snap, last summer’s record temperatures, and potentially this summer as well. In fact, during last summer’s record high temperatures, Texas had to purchase electricity from Mexico to get some relief because they have better connections there than with any of our bordering states.
The Tres Amigas plant would allow for excess energy from other grids to flow into Texas during times of crisis, which would be a huge stabilization factor for what is considered to be inadequate reserves in Texas. Additionally, during times of the year when Texas has excess energy, particularly wind or other green energy, the new development would allow for this to flow into the rest of the country. Right now some people question the cost of transporting wind energy from where it’s collected in the panhandle to places like Houston. Shipping it to New Mexico would be cheaper and allow for excess Texas green energy to flow into the rest of the country. In my opinion, everybody wins.
Anyway, as I’ve said, this is great news for Texans. Anything that encourages this plant to completion and operation is good for the whole country. Additionally, Matsui, the company investing in the superstation, has a vested interest in smart grid technology, Carbon Dioxide Emissions, and renewable energy. It stands to reason this means that the Tres Amigas will also implement many environmentally friendly technologies that should make Green Advocates happy.
Texas Electricity unlikely to follow Austin’s Green Example
November 18, 2011
In a recent article by the NPR, writer Terrence Henry takes an admiring look at Austin and their commitment to green energy sources. He asks whether or not the rest of Texas will be likely to follow their example.
My knee-jerk, educated guess? Unlikely.
Austin is pretty unique from an energy perspective. Their energy needs are modest compared to larger metropolitan areas, and 1900 of their megawatts come from natural gas plants. They also get 10% of their energy needs from nuclear power, having a 16% ownership in the South Texas Nuclear Station. They have a 50% ownership of just one coal plant, and it provides just 300 megawatts.
This is all great for Austin. I just happen to think it unlikely that other areas will be able to follow suit. For starters, there are no more nuclear power plants being constructed or planned after financing fell through on NRG’s designs to build two more reactors to add to the Texas electricity grid. And as I’ve written previously, Texas is having real issues getting investors to invest in more natural gas powered plants.
Austin plans on replacing their modest coal energy needs from wind energy, which is fantastic, but is also problematic because wind power is unpredictable and oftentimes the wind isn’t blowing when Texans need the energy the most (in the summer). As a result, I doubt many other cities will be willing to invest too heavily in an inconsistent source of green energy such as wind.
So with no potential for nuclear plans, a scarcity of activity on the construction front for natural gas plants, and the inconsistency of wind energy, my guess is that other cities won’t be able to follow Austin’s example.
Texas Electricity Provider Map
September 30, 2011
Last week’s purchase of First Choice Power by Direct Energy was yet another major acquisition of a Retail Electricity Provider by a major energy conglomerate. There’s been around a half a dozen of these deals in the past year, and in my opinion things have gotten a bit muddled and confusing. So I wanted to write a post to chart exactly who owns who in the deregulated electricity space in Texas.
Dominion Resources: Dominion Energy probably isn’t a name that is very recognized by Texas electricity customers. However, they are a huge energy company that deals in both energy generation and distribution in multiple states. Headquartered in Richmond, Virginia, they own the incumbent and regulated electricity providers in Virginia and North Carolina. In Texas, they own Cirro Energy, which they purchased in 2008. Earlier this year, Cirro Energy purchased Simple Power and absorbed their customers.
NRG: NRG, a new Jersey based company, is another huge energy company with massive power generation resources. On top of energy generation plants, NRG also owns Green Mountain Energy, which they purchased in 2010 for 350 million dollars. In 2009, they purchased former incumbent Texas electricity provider Reliant Energy for 287 million and change when Reliant was under heavy financial distress. This was a steal considering Reliant was the second largest REP in the state at the time and has huge brand recognition. In turn, Reliant Energy owns (and I believe operates) Pennywise Power, which is a new brand they’ve put into the deregulated Texas electricity market to try and capture different customers without effecting their core brand. So NRG owns Green Mountain and Reliant, and Reliant in turn owns Pennywise Power.
Just Energy – Just Energy is yet another big energy company, with resources all over North America. They had been a fairly smaller player in the retail electricity market in Texas until recently. Just Energy itself was mostly a niche provider, offering 5 year long term contracts to customers. However, they recently purchased the entire retail arm of Fulcrum Power. That includes Amigo Energy, Tara Energy, and Smart Prepaid. So now all of those brands are part of the Just Energy portfolio. They’ll likely keep the branding and still do business under the names Tara and Amigo, but it’s all Just Energy. Just Energy also owns another smaller REP, Commerce Energy.
Direct Energy: Direct Energy is actually a subsidiary of a British company called Centrica, but they’re known almost exclusively in North America as Direct Energy, so that’s the name we’re going with. Direct Energy is yet another huge energy generation company with huge and varied resources. In the retail electricity space they do business as Direct Energy and they are one of the biggest REP’s in Texas. They also operate in Texas as WTU Energy and CPL Energy in two respective TDSPs. In the Spring, Direct Energy also purchased Gateway Energy Resources for 90 millions dollars. Since then, Direct has removed Gateway as a brand from doing business in Texas. Just last week, Direct Energy made another huge purchase, this time of First Choice Power for 270 million dollars. Which is a huge price tag. So, as of now, every company I mentioned above is really a subsidiary of Direct Energy.
Constellation Energy: Constellation Energy is the largest energy supplier in America. Their 2007 revenues were 21 billion dollars. So yes, they’re another big energy guy. They own the regulated electricity entity Baltimore Gas and Electric. In 2 month period last spring and summer, Constellation announced purchases of both StarTex Power as well as MX Energy, two retail electricity providers that operate in the Texas deregulated markets.
Gexa Energy: NextEra Energy is the parent company of Florida Power and Light, the regulated electricity provider for much of Florida. They’re another big energy company, having generation resources in over 20 states. In 2005, Florida Power & Light purchased Gexa Energy. They still do business in Texas under the name Gexa.
Dynowatt: Dynowatt is a subsidiary of Accent Energy, which is a large company with natural gas ties in Ohio. Accent also serves deregulated New York, but they do business in Texas as Dynowatt.
TXU Energy: TXU is actually a subsidiary of Energy Future Holdings, which also owns Luminant, the power generation portion of the old TXU company that was forced to split because of deregulation laws. Now Luminant and TXU operate separately. TXU is the largest individual REP in Texas and one of the two former incumbent providers.
The following Retail Electricity Providers are stand-alone entities:
Texpo Energy: Texpo Energy is a smaller company operating in Texas. What makes them interesting is that they actually operate under 3 different brand names while all sharing the same PUC Certificate. The other two brands are Southwest Power & Light and YEP. So to sum things up, Texpo, Southwest Power & Light, and YEP are all the same company operating in Texas under different names.
Hopefully this helps to give people a clearer picture about who some of the players are in Texas electricity. It is important that people know exactly who the company is that is supplying their electricity. For example, if someone had a bad experience with one company, they might not want to get service from another one of their subsidiaries. And since there’s been so many purchases and mergings of REP’s in the last 6 months, I thought it might be a good idea to chronicle which companies have ended where after the dust has settled. I’ll try to update this page moving forward as well. I doubt we’ve seen the last of big REP acquisitions, so this family tree might change.
I’ve included a crude flowchart below. Yes, I do realize it looks like it was put together by a 3rd grader.
Texas Electricity Ratings Update: New Rankings Released
September 27, 2011
Good afternoon, everyone. I just wanted to post a quick update that I’ve revised the Texas Electricity Ratings ranking of providers this week. The new rankings and numbers are posted, although there wasn’t much change in the actual order of providers.
Bounce Energy remained in the top spot, boosted by their great freshman performance in the JD Power Rankings that were released in August. They raised their average a few tenths of a point with that addition and by continuing to work to their strengths as an REP. So congratulations to Bounce Energy!
Champion Energy held onto the number 2 spot, although Gexa (leapfrogging Direct Energy) closed the gap after Champion was hit with some negative reviews by customers after August heat spikes wreaked havoc on their indexed plans. Direct Energy and StarTex power rounded out the top 5.
It was a tough summer for electricity providers in Texas. Lots of companies suffered losses because of the energy shortages. And because of some bad pricing scenarios with some variable and indexed plans, many providers have pulled their Month To Month plans from the market completely. By the same turn, lots of customers had bad summers as well, just because of bad circumstances and the worst summer in Texas recorded history. That being said, the wheels keep turning. Below is a full list of the provider rankings.
Texas Electricity Ratings rates providers in the marketplace based on a number of different factors, including pricing, PUC complaint statistics, Better Business Bureau evaluations, third party surveys, customer service and many other important categories.
Texas Electricity: Market Rates
September 12, 2011
It’s been a long time since I posted a blog update with the list of different electricity rates throughout the 5 different regions of Texas. To be perfectly honest, making that post became too cumbersome, and I was trying to find some easier ways to do that regularly with some technological solutions. Well, that hasn’t happened, although I’m still working on a long term solution. In the meantime, however, I wanted to give everyone an idea of the electric prices in a more general sense around the market this week, now that the summer energy crisis seems to be behind our state. This should give people an idea moving forward about what the fair rates are in the market for their region of deregulated Texas electricity.
Lets start with Oncor. Oncor is the biggest and most populated deregulated region of Texas. Their electric rates are also typically the cheapest. Right now, the cheap variable rates with promotional pricing are listed between 5 and 6 cents per kWh. After the promotional rate expires, it’s impossible what to tell what the rates would be, but I’d expect anything between 9 and 11 cents per kWh. A fair price for any long term fixed rate electricity plan, anywhere from 6 months to a year or two, should be between 8 and 9.5 cents per kWh. For green energy fixed rate plans, expect between 9.5 and 11 cents per kWh.
Next is Centerpoint. Right now, Centerpoint is pretty close to the rates in Oncor. Actually, they’re almost identical in terms of their ranges for what is a competitive market rate. I’d except them to match pretty closely to the rates in Oncor, with maybe just a few tenths of a cent more expensive across the board.
AEP Central’s range of electric rates is pretty much identical to Centerpoint’s. Typically, AEP Central is the most expensive region in Texas. And while they have less options for promotional variable rates, in general a customer can still get a decently priced fixed rate electricity plan in the 8 to 11 cent range, pending on the term of the contract.
AEP North is a bit more pricey, but again, not much. The promotional rates for variable electricity plans start close to the 7 cent per kWh rate. And the fixed rate electricity plans start at about the 9 cent per kWh range and end at about the 11 or 11.5 cent kWh point. Green electricity plans start at about a half cent per kWh higher and range accordingly.
Finally, is TNMP (Texas New Mexico Power). This region is a bit cheaper than both of the AEP regions mentioned above, and settles in right around the same rates as Centerpoint.
Again, this post isn’t as detailed per region with specific electricity plans and electricity providers, like it has in the past, but it should give consumers an idea of the market prices if they’re looking for new plans now that the summer heat seems to be subsiding.
Deregulated Electricity is Working
July 6, 2011
The deregulated Texas Electricity market receives a lot of criticism from the people who live here. However, ironically, it is universally praised and used as a model by every other state that is moving to deregulation. And in an awesome article in today’s Fort Worth Star-Telegram, author Mitchell Schnurman takes a look at why Texas deregulated electricity is considered such a home run by the other 13 deregulated states. The entire article is worth a read, but I wanted to break down some of the most interesting items here on the blog.
Adjusting the ’01 price for inflation, today’s rate is 31 percent lower in North Texas, he reported. One more metric: Since December 2001, rates in the regulated sector — municipal utilities, cooperatives and investor-owned utilities — often climbed by double-digit percentages. But prices offered by competitive retailers dropped by 26 to 43 percent.
Here’s the first item I wanted to take a look at, and the reason should be obvious. One of the most consistent and common gripes I hear from people is how prices have gone up since Texas deregulated. This manifests in people, lots of people, complaining about how deregulation was all a ruse to gouge prices and make profits at the expense of Texans. Well, that’s absolutely not true. Yes, we had some years with exorbitantly high prices, but prices would have been high no matter what, because they’re based on natural gas rates. The rest of the country had high rates that year as well. Per the quote above, prices are 31% lower in the deregulated areas than they were before deregulation in 2001. And the areas that remained regulated are actually higher than they were in ’01, while the competitive areas dropped between 26-43%!
Still, the state’s success also depends on competition among retailers and generators, and the design of the state’s deregulation scheme. That’s spurred more wind generation, making Texas easily the largest producer of wind power in the country and fifth-largest in the world.
I actually don’t have much to elaborate on this point, but I definitely wanted to single it out for posterity. When deregulation was set in motion, the idea was that the companies themselves would be forced to work more efficiently to reduce the bottom line for customers in an effort to remain competitive with the other providers. And that is largely what has happened. And in the process, Texas has also become the fifth largest generator of wind power in the world. So a side effect to innovation and market efficiency is remarkable grown in Green Energy.
To gauge the competitiveness of a market, analysts often focus on the number of customers that switch providers. In North Texas, about half the residential base has left TXU Energy, the affiliate of the incumbent monopoly, and statewide, the total switch from the previous incumbent is about 56 percent.
In Pennsylvania, over roughly the same period, 19 percent of residents have switched, and in some areas, it’s less than 5 percent, Hudson said.
Many Texas customers shop aggressively and stay with their provider because they get good terms. TXU estimates that 87 percent of residents in North Texas have changed either their provider or their electricity plan, and that’s a better gauge of competition in practice.
Well, this quote certainly is a site for sore eyes. It’s also interesting because the number one thing I consistently see in the market for Texas electricity is that a lot of people still don’t seem to understand how the market works at all. Many aren’t even aware of choice. However, according to this metric, it seems that half of Texas actively shops and takes advantage of the Texas Electricity deregulated market. That’s fantastic news. Now if I can just get the other half to pay attention, we’ll be doing great.
Also of interest in that quote is how many people have left TXU.
Since 1999, hundreds of power plants have been built in the deregulated electric market, adding 45,000 megawatts of generation to the grid controlled by the Electric Reliability Council of Texas. Peak demand in ERCOT, set last August, was 65,776 megawatts.
Interesting. So our market and our demand is growing substantially bigger, while our prices continue to drop. That is the definition of positive grown, in my opinion.
I strongly urge everyone to read the entire article in the Star-Telegram. It really is a great read, and it touches on a number of fascinating things in regards to how the market works in Pennsylvania, how the two states compare, as well as some other items that can keep markets like Texas low. And those were quotes and topics I didn’t even highlight here for examination.
Texas Electricity & Obama’s Clean Energy Agenda
June 2, 2011
President Obama’s been crossing the country and talking about the importance of Green Energy technology and how it is the future of America. He is touting it as a solution to America’s job problem, it’s energy problem in regards to a dependence of foreign oil, as well as hallmark to us improving as an environmentally friendly country. All of these would and are great things, but there are a lot of outstanding questions in regards to any potential moves and expansion made towards Green Technology, particularly in regards to Texas Electricity. The first question really needs to be: What constitutes Green Energy?
Traditionally, when someone says Green Energy, the first that comes to their mind is solar power, or wind powered energy. Which is fair, those are the greenest of the green technologies. But is that the only things being developed as part of the President’s proposed Aegis of green energy? To Texans, specifically, where does Natural Gas fall into the picture? We’re curious about this for a number of reasons. For starters, natural gas and the market prices of natural gas are what set the market rates for electricity in Texas. Which makes things interesting considering the debate that has been raging recently over the technological advancements in mining for natural gas in deposits of Shale.
Recent technology changes have allowed us to mine for natural gas in areas that were previously not financially viable or efficient. We can now use a chemical, water, and pressure based combination to “frack” rocks and siphon out the natural gas deposits between the rock cracks. Now where this all starts to get interesting is when you take into account whether or not this new ability to mine for natural gas deposits will be part of the Obama administration’s Green Energy initiatives.
What makes natural gas so compelling is that it would immediately achieve one of the goals President Obama has laid out about his green energy initiative: it would drastically reduce America’s dependency on foreign oil. Taking into account shale reserves, there is at least six times more natural gas available for mining than there was just a decade ago thanks to new technology. Additionally, natural gas burns substantially cleaner than oil or coal, which makes it a relatively green technology. Furthermore, current pipelines used to transport oil can be modified relatively easily to move natural gas. Natural gas can be used to power vehicles, and it is currently used to power most of the electricity generating plants in the Texas electricity market. And a final kicker? Long term, natural gas quite probably will end up being cheaper than wind or solar power.
The Fracking process is now without it’s potential drawbacks and controversy. Environmentalists say that not enough is yet known about the side effects of Fracking for natural gas, and there are also accusations that the process can contaminate groundwater sources and reservoirs, potentially contaminating drinking water. Some politicians are outraged that there is a lack of regulation over the process now.
Given that many environmentalists aren’t on board with new natural gas mining in shale deposits dampens the chances that it will be adopted under the umbrella of the President’s initiatives as a Green Energy. Which is interesting, because natural gas is fantastically more environmentally friendly than coal or oil. However, it were adopted, America could be looking at a relatively cheap energy transition, and the natural deposits located in the US, particularly in Texas, would give us energy independence and actually likely turn us into an exporter of natural gas to other countries. Texas electricity would likely benefit from even lower electricity prices, increased jobs, and economic security that our state will remain the energy capital of this country well into the future. The only question is whether or not natural gas will be seen by the right people as “green.” Fingers crossed.
Market Rates: Houston Electricity & Centerpoint 5/24
May 24, 2011
Good morning, everyone. Here is today’s shopping guide entry for Texas electricity, covering the Centerpoint TDSP. This includes electricity in Houston and the surrounding areas. The rates for Houston electricity are a little bit more expensive than Dallas electricity, but they’re still much cheaper than the rest of the state of Texas. To help shoppers get a head start on finding new electricity plans, below is a list of the most regularly ordered types of electricity plans in Texas, both short term month to month electricity plans, long term fixed rate electricity plans, and environmentally friendly green energy plans. The list below should be a good place for Houstonians to start shopping and save money.
Month to Month Electricity Plans:
Month to Month Green Electricity Plans:
Long Term Fixed Rate Electricity Plans:
Long Term Fixed Rate Green Electricity Plans:
cities covered in this shopping guide: Houston electricity; Baytown electricity; Kingwood electricity; Sugar Land electricity; Humble electricity; Galveston electricity; Pasadena electricity.
Market Rates: West Texas Electricity 5/13
May 13, 2011
Good morning, Texans. Today is the last Texas electricity shopping guide entry of the week. It examines the electric rates for Texas-New Mexico Power (TNMP), which is a huge pocket of service in West Texas and smaller pockets all over the state. It provides service for: Fort Stockton electricity, League City Electricity, Lewisville electricity, Friendswood electricity, and more. The electricity prices are about on par with Abilene and San Angelo (AEP North), so they’re about a cent and a half-more than than Oncor’s region. Below are the cheapest electricity plans listed out by their service periods and green energy content.
Month to Month Electricity Plans:
Month to Month Green Electricity Plans:
Long Term Fixed Rate Electricity Plans:
Long Term Fixed Rate Green Electricity Plans:
Market Rates: Dallas Electricity 5/9
May 9, 2011
Greetings, all. Hopefully everyone had a great weekend. Today is our first entry into our Texas electricity shopping guides for low electricity rates. Dallas electricity rates are the lowest in the state of Texas, so keeping your electricity bills low is easier than it is on other areas of Texas, but that doesn’t mean shoppers should be indifferent towards understanding the market. With the approaching summer heat, electricity prices will continue to rise, so getting the best deal is important to having reasonable bills during the summer heat. Below are a list of the most commonly ordered types of electricity plans in Texas with the lowest prices, so hopefully it will help Texans save money on their electricity.
Month to Month Electricity Plans:
Month to Month Green Electricity Plans:
Long Term Fixed Rate Electricity Plans:
Long Term Fixed Rate Green Electricity Plans:
Texas Electricity Ratings: The Blog 