Texas Electricity Market Design Most Successful in North America

Ranks 1st in the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS)

HOUSTON – December 17, 2012 – The residential and commercial/industrial electric markets in Texas top the 2012 list of competitive electric markets in the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) that was released today. Texas has now earned the top spot for six consecutive years while achieving the 2012 top rating of “Excellent” for its implementation of customer choice.

These are findings of the Distributed Energy Financial Group LLC (DEFG), a management consulting firm specializing in energy and helping its clients better connect with their customers. The report identifies North American electricity markets that have successfully restructured to allow direct access or consumer choice and explains the policy choices that led to those successes.

“In Texas we refuse to rest on our laurels and have every intention of remaining number one by continuing to add features in our nation’s leading electricity market,” said Donna L. Nelson, chairman of the Public Utility Commission of Texas. “We keep finding ways to increase customer value in the marketplace through smart grid innovations and ongoing improvements in the shopping experience, just to name a few.”   DEFG found in its research that the Texas retail electricity market is very competitive for all customer classes. Texans in competitive areas are engaging in the market in record numbers and making choices to meet their energy needs. The depth and breadth of retail electricity offers is unparalleled in Texas. Approximately 40 retail energy suppliers compete for residential customers in competitive areas of the state by offering a broad range of products and services designed to meet customers’ needs.

“Retail electricity competition grew in 2012 at an even more aggressive pace than in 2011. Competition has prompted retail energy providers to deliver lower prices and a greater number of innovative energy offers for consumers. The overall results include record numbers of customers engaged and a better alignment of customers with the services they prefer. For commercial and industrial customers, retail competition also continues to mean better global competitiveness,” said Nat Treadway, DEFG managing partner and lead author of the report.

Texas continues to see a surge in consumer-driven product and service innovation. New smart grid infrastructure investments – advanced meters, mobile communications and control devices, and in-home usage displays – allow entrepreneurial retail energy suppliers to develop innovative pricing and service choices. These investments are helping facilitate a new wave of customer-focused innovation. Consumers now have more choices, more information and better ways to control their energy bills. The Texas market is seeing several related innovations such as: more time-of-use rates, more prepaid energy choices, and more energy management devices and services. Additional innovative product launches are expected moving forward.

The robust levels of choice, competitive and innovation in Texas have also helped drive retail electric price offers to among the lowest available in the United States.

On a national level, both residential and commercial/industrial customer choice is thriving in many U.S. states and Canadian provinces according to the ABACCUS report. These areas have vibrant markets with numerous retail energy suppliers and numerous service choices for customers of all sizes. In addition to Texas successes, New York, Illinois, Pennsylvania, Connecticut, Maryland, and the Canadian province of Alberta are also acknowledged for their policies that foster choice for electricity customers.

DEFG develops ABACCUS scores and rankings based on data available in the market. ABACCUS provides a baseline for building properly functioning competitive energy markets. Copies of the full report are available at www.defgllc.com.

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