Wind Development in Texas: History and Future Growth
Fall Update on the Competitive Retail Market in ERCOT
1. Update on Retail Prices in the
ERCOT Competitive Electric Market
!
Fall 2012!
Legislative advertising paid for by: John W. Fainter, Jr. • President and CEO Association of Electric Companies of Texas, Inc.
1005 Congress, Suite 600 • Austin, TX 78701 • phone 512-474-6725 • fax 512-474-9670 • www.aect.net
2. The ERCOT Competitive Retail Electric
Market is Providing Strong Customer
Benefits!
Key Takeaways
– Price offers are substantially lower than prices available just before
competition began, especially when adjusted for inflation.
– Retail electric prices have fallen even as other energy commodity prices –
such as gasoline, crude oil, natural gas and coal – have risen.
– Texas’ national electric price ranking has improved since the market
opened in 2001.
– Every competitive area in ERCOT has variable and 1-year lock offers
available that are far lower than the national average price and nearly all
state averages.
– Among states like Texas that depend heavily on natural gas for power
generation, Texas prices compare favorably, with even lower prices
available to those in the competitive market.
– The ERCOT market provides efficient market prices that track natural gas
prices.
– Since 2007, Texas’ prices have fallen while other states’ prices have risen.
2
3. Lower Prices Available Today than
Before Competition Began
Dec. 2001
Lowest Fixed-Price Lowest Dec. 2001
prices, not
Service Area Offer Available prices, adjusted
adjusted for
(12-month term) Offer for inflation
inflation
AEP Texas Central 9.3¢/kWh 7.0¢/kWh 9.6¢/kWh 12.5¢/kWh
AEP Texas North 8.5¢/kWh 5.3¢/kWh 10.0¢/kWh 13.1¢/kWh
CenterPoint
Energy 9.2¢/kWh 6.0¢/kWh 10.4¢/kWh 13.6¢/kWh
Oncor 8.5¢/kWh 5.3¢/kWh 9.7¢/kWh 12.7¢/kWh
TNMP 8.7¢/kWh 6.0¢/kWh 10.6¢/kWh 13.9¢/kWh
Sources: PUC Historical Data, Bureau of Labor and Statistics, www.powertochoose.org offers as of November 1, 2012 3
4. Texas’ National Price Ranking Has
Improved Since 2001
18
2001 State Ranking (Pre-Competition)
16
¢/kWh
14
12
10
8
6
4
2
0
KY
WA
WV
WY
MT
MO
OK
MS
GA
VA
WI
MI
AZ
IA
TX
PA
AK
MA
VT
ME
ID
OR
TN
NE
UT
IN
AL
SD
CO
MN
KS
MD
SC
AR
LA
OH
FL
DE
IL
NM
NV
NJ
CT
CA
RI
NY
HI
ND
DC
NC
NH
July 2012 State Ranking (Latest Available)
26
24
22 Average lowest 12-
20 month fixed price
18 offer in competitive
16 market in July 2012:
14 8.6¢/kWh
12
¢/kWh
10
8
6
4
2
0
FL
WY
MT
VT
NY
ID
IN
ND
MS
SD
NC
TX
MO
NE
SC
KS
OH
CO
DC
DE
WI
RI
NH
NJ
HI
MI
KY
TN
UT
CT
AK
MN
NM
MD
IL
AZ
OR
ME
AL
OK
IA
AR
CA
WA
MA
VA
PA
LA
GA
NV
WV
Source: EIA average annual residential rates for 2001 and April 2012 monthly data (latest available information). Average lowest available price from
powertochoose.org Web site as of 7/15/12 for a residential customer using an average of 1,000 kWh per month.
4
5. CENTS&PE&R&KWH&
0"
2"
4"
6"
8"
10"
12"
14"
16"
18"
20"
LOWEST"DALLAS/FT"WORTH"PRICE"
LOWEST"ABILENE"PRICE"
LOWEST"DALLAS/FT"WORTH"PRICE"9"1"YR"
LOWEST"LEWISVILLE"PRICE"
LOWEST"CORPUS"CHRISTI"PRICE"
LOWEST"HOUSTON"PRICE"
LOWEST"ABILENE"PRICE"9"1"YR"FIXED"
Louisiana"
LOWEST"LEWISVILLE"PRICE"9"1"YR"FIXED" Na>onal&Average&
Washington"
LOWEST"HOUSTON"PRICE"9"1"YR"FIXED"
Kentucky"
Oklahoma"
LOWEST"CORPUS"CHRISTI"PRICE"9"1"YR"FIXED"
Idaho"
Arkansas"
Indiana"
West"Virginia"
Tennessee"
North"Dakota"
Mississippi"
Oregon"
Wyoming"
South"Dakota"
Montana"
Utah"
Illinois"
North"Carolina"
Every Competitive Area in ERCOT Has
Texas"(Statewide)"
Missouri"
Variable and 1-Year Lock Offers Available
Nebraska"
South"Carolina"
Alabama"
Nevada"
Virginia"
that are Lower than the National Average Price
Florida"
Iowa"
Kansas"
All&Data&from&July&2012&
Arizona"
Minnesota"
Georgia"
US"AVERAGE"
Ohio"
New"Mexico"
RESIDENTIAL&RETAIL&ELECTRICITY&PRICES"
Colorado"
District"of"Columbia"
Pennsylvania"
Maryland"
Delaware"
Wisconsin"
Rhode"Island"
Massachuse[s"
Maine"
Michigan"
California"
New"Hampshire"
New"Jersey"
Vermont"
U.S. Energy Information Administration, latest available data
Sources: PowerToChoose.org offers as of April 16, 2012,
Connec]cut"
New"York"
Alaska"
Hawaii"
U.S. Energy Information Administration, July 2012 data (latest available)
Sources: PowerToChoose.org offers as of July 15, 2012,
5
6. Retail Electric Price Offers Have
Fallen Even as Other Energy
Commodity Prices Have Risen
320% 209%
Percentage Change in
Commodities
December 2001 – November 2012
101%
43%
31%
-13% -41%
Oil Gasoline PRB Coal Natural Gas Inflation ERCOT Avg. ERCOT Avg.
Low Fixed Offer Lowest Offer
Sources: Public Utility Commission of Texas, U.S. Energy Information Association, NYMEX Commodity Exchange, Bureau of Labor Statistics, Power to
Choose
Notes: Commodity prices latest available as of November 13, 2012.
Inflation covers period from 2001 to 2012 6
7. Texas Market Compares Favorably to Other
States Utilizing Natural Gas as the Primary
Generation Source!
Average Residential Electric Price Among Natural Gas-Intensive States
July 2012 (Latest Available Consistent Data)
20.00
18.00
Average Lowest Available 12-
16.00
Month Fixed Price Offer in
ERCOT Competitive Market
14.00 (July 2012): 8.6¢/kWh
12.00
¢/kWh
10.00
8.00
6.00
4.00
2.00
0.00
AK NY CA ME MA RI FL NV TX MS LA
Sources: Energy Information Administration (data as of July 2012); EIA natural gas-intensive states;
powertochoose.org as of 7/15/12.
Note: Texas statewide average price includes prices from both competitive and regulated areas of the state.
7
8. ERCOT market providing efficient
Market prices
NYMEX
natural
gas
and
residen2al
electricity
prices
January
2007
–
October
8,
2012;
mixed
measures
NYMEX
natural
gas
($/MMBtu)
NYMEX
Average
12-‐Month
Strip
Average
Compe22ve
Offer
$14 Average
Lowest
12
Month
Fixed
Offer
32
Average
Lowest
Offer
¢
$12 28
Residen8al
electricity
(¢/kWh)
¢
$10 24
$8 20¢
$6 16 ¢
$4 12
$2 8¢
$0 4¢
1/1
11/19
4/21
5/11
6/1
11/1
3/21
3/30
6/15
9/23
12/8
2/23
7/27
3/15
8/16
1/17
8/22
1/23
6/25
9/10
11/7
9/4
2/4
7/7
6/6
4/9
10/12
12/28
2007
2008
2009
2010
2011
2012
1 Average electric offers across the 5 TDSP’s for residential customers using an average of 1,000 kWh per month. Excludes any 0.0¢/kWh introductory offers.
Sources: NYMEX; www.powertochoose.org
8
9. Since January 2007, Texas’ Prices Have
Fallen While Others Have Risen
Residential Price Changes (%) - Jan 2007 - July 2012
65
Restructured US Average
States (excl. TX)
Gas-Dependent (excl. TX) 23%
45
States (excl. TX) 18%
2%
25
Texas
-8%
5
WY
TX Competitive
TX Statewide
Natural Gas States (-TX)
Restructured States (-TX)
WI
NJ
SC
IN
TN
MD
MN
SD
NM
WV
ID
US (-TX)
ME
MS
OR
CO
OH
MI
NH
AR
DC
NC
MT
ND
NV
DE
NY
KY
KS
NE
RI
IA
HI
CT
LA
AL
UT
AZ
PA
VA
VT
WA
MO
IL
FL
MA
OK
GA
CA
AK
-15
Lowest Competitive
Offer Prices in Texas
-35 -28%
Source: EIA average annual residential rates for January 2007 and July 2012 (latest available data), powertochoose.org for
January 2, 2007 and July 15, 2012 9
