Deregulated and Regulated Texas Electricity Rates

Customers are complaining that energy retailers are sending them higher energy bills than what their previous electric and gas companies charged them. In several states, utilities, including Texas electricity, are deregulated and can be provided through different retailers to residents.

These retailers have been reportedly offering gas and electricity at lower rates than traditional electric and gas companies, but have nonetheless resulted in higher bills. Customers are alleging that energy service companies (ESCOs) are using false marketing campaigns by featuring deceptive electricity rates to lure in customers.

Texas is one of the states in which energy is not regulated, with a number of retailers competing for customers. Texas became a deregulated state almost 15 years ago when then-governor George W. Bush signed the law into practice. The governor stated that the “competitor in the electric industry will benefit Texans by reducing monthly rates and offering customers more choices.”

Traditional utility companies are required to explain any increases in gas and electric rates to state regulators and the general public before the rates can actually increase. However, energy retailers are not held accountable for any such increases because they are not regulated by state law.

Overview of Texas Electricity Rates

Texas electricity rates have become a major issue to state residents, as the state ranks fifth in regards to the country’s most expensive energy bills.

In contrast the state has some of the lowest electricity rates in the country, with deregulated regions pay approximately 15% more for electricity than cities with regulated utilities like Austin and San Antonio. Even though the bill was meant to decrease energy bills, Texas electricity has become an expensive part of life for deregulated areas in the state.

This is because there are now over 100 different retail energy providers (REPs) offering Texas electricity to residents. Even though there are many choices for customers to choose from, these companies have been allegedly resorting to false or deceptive marketing to recruit new customers in this competitive market.

These tactics include offering free devices that come with the contracts which often present much lower rates than what the customers are currently paying for. These low energy rates often entice customers into locking themselves into contracts which may later force the customer to pay much higher rates for Texas electricity.

According to a recent survey sponsored by a third party company, 42% of Houston residents want improvements from REPs in terms of contract transparency and the rates they may realistically be charged. The survey also stated that four in ten Houston residents would change REPs immediately if they were not locked into contracts.

Even though the deregulation bill was meant to give more options for Texas electricity, resident reports indicate that this has not resulted in positive experiences.

The marketing practices of energy retailers have resulted in legal action, with customers alleging the companies had deceived them into signing contracts with the offer of cheaper rates.

Join a Free Energy Deregulation Class Action Lawsuit Investigation

If you buy your electricity and gas through an energy retailer in a state where energy was deregulated and your energy costs went up, you may qualify to file an energy deregulation overcharge lawsuit or class action lawsuit.

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