For years law makers and politicians in Texas had been fighting to deregulate the electric industry. They strongly believed that freeing the industry from state government controls would encourage competition and lower prices for both homeowners and businesses. And since Texas has the largest electricity market in the country, there were many companies that expressed an interest in entering the market as soon as deregulation became as reality. Finally in 2002 these businesses got their wish as the Texas Senate passed a law that mandated electricity deregulation.

The law allowed customers in the Lone Star State to select their own electricity service provider from a long list of Retail Electric Providers (REPs) in their area. At the beginning, the new law was a hit as home and business owners shopped around for better deals and scores of new providers entered the marketplace. It seemed at the time that lawmakers had been right and that deregulation was the answer to rising electricity prices in Texas. In fact, since 2002, more than 85% of business owners in Texas have changed their service providers at least once, while more than 40% of homeowners in deregulated areas also switched providers.

As we mentioned, there were also many new electricity providers that entered the market after deregulation. According to state records, more than 60 startup firms entered the electricity market in the two years following the passage of the new law. These firms provided increased competition in both commercial and residential areas.

But not long after the new laws were accepted and embraced, energy prices slowly begin to rise and didn't stop for several years. According to one website, the average electric bill in Texas rose by more than 40% from 2002 to 2004. Not surprisingly, this left many customers feeling as if they had been lied to and that deregulation was just a scam concocted by politicians.

On the other side, supporters of deregulation tried to explain the situation. They held that electricity prices were increasing because the cost of natural gas has gone up. Natural gas is an important fuel used in power plants and at the time it was reaching record highs. The reality was, they said, that in the same period that electricity prices went up by 40 percent, natural gas prices shot up by 60 percent. This meant that deregulation had actually saved people money.

But customers weren't ready to hear this. All they saw was a larger and larger bill every month and smiling politicians on their TV screens doing what politicians do best-making empty promises.

In the end, however, the politicians were right. As soon as natural gas prices began to stabilize and later declined, the price of electricity fell across the state. According to recent numbers, from the summer of 2008 to spring of 2009, the cost of electricity plummeted by nearly 40 percent. 

Many experts and economists attribute this precipitous drop in prices to the overabundance of natural gas in the state and the decreased overall demand for energy due to the economic recession. It is also important to note that deregulation itself has encouraged lower prices because of increased competition and greater choice.

As the demand for energy continues to fall as the recession rolls on, most experts believe that prices will fall in concert. And customers who were once skeptical of deregulation now believe it may have saved them from the increases in electricity prices many other states are currently experiencing.

Falling prices and lower energy bills were also a godsend for businesses in the Lone Star State who had been forced to cut back on just about everything in the midst of the worst recession in decades. Many of them claim that they would have likely had to close up shop had it not been for lower electricity costs. This is especially true for businesses like factories that customarily spend hundreds and thousands of dollars a year on their electric bills.'

Though deregulation appears to be a great success in Texas, it is difficult to say if it would work well in other states. As we mentioned, Texas has by far the largest electricity market the country. In fact, the Lone Star State uses more electricity than all but ten countries in the world. And with a market that large it is a cinch to support scores of startup firms and to reap the benefits of increased competition. In other states, however, the market simply may not be large enough to handle the level of competition needed actually reduce prices.

No less of a legend in the field of economics than the late, great Milton Friedman once said that the number one priority of any business is to earn a profit. Most of us already have a grasp of this, since a business which is not profitable is not a business which will stick around for very long. People also have a tendency to conflate profit with revenues, however ? but revenues are far from the whole story. Profits are revenues minus expenditures, so businesses can become more profitable not only by increasing revenues, but also by reducing expenses. One of the largest costs faced by any business is energy costs, making it vital to reduce energy costs in order to ensure the profitability of your business. However, this can be done with relative ease. One way to dramatically reduce your energy costs is to use different light bulbs. Many light fixture can operate with lower wattage bulbs or even LED light bulbs, which while costing a little more initially will produce a lot of savings in the long run, as will compact fluorescent bulbs if it is possible to use them in your existing fixtures. Using timers for appliances which use a lot of energy can also save your business a lot of money on energy. Many businesses simply leave electrically powered items on over the weekend, resulting in a lot of wasted resources (not to mention money). Putting these items on a timer which will automatically shut them off will save a great deal of money in a relatively short amount of time. Timers are inexpensive and easily installed as well, so there is really no reason not to use them in your office. Simply installing proper insulation in your building will also greatly reduce your energy expense it can be quite expensive to heat or cool your office, so insulation will prevent this heat (or cold air in the warmer months) from escaping. Insulation is also not terribly expensive and will pay for itself many times over. You may also want to consider having an energy audit done. You can engage the service of professionals who specialize in inspecting buildings with an eye towards more efficient use of energy. You'll have to fix the issues which an audit uncovers, but there is an incredible amount of money to be saved through implementing what are usually simple and inexpensive solutions. Other than simply saving your business money, saving energy in the office also benefits the environment by reducing the demand for energy. Remember Milton Friedman? He also said that the greatest thing any company can do towards achieving social justice is to make a profit in the case of reducing energy expenditures, he is right on the money. If you can reduce the strain your company produces on the environment, it is a great step which deserves to be applauded. Your business can and should be among these companies.

As a business owner and a user of commercial electricity in Texas, it is important to reduce electricity costs and improve your bottom-line. Even though electric deregulation occurred in January of 2002 in Texas, electric deregulation and choosing a new electric provider is still a very new concept. Most large commercial and industrial companies have already made a switch because they knew that they could save a lot of money. By switching to a new Texas electric provider that has your best interest in mind, and by following some simple energy savings tips for your office you will start to see some significant savings to your business' bottom-line.

When choosing a new Texas electric provider for your business you need to do some homework, especially if you are a large commercial or industrial user of electricity.

You can call up a bunch of retail electric providers (there are currently over 40 active REPs operating in Texas) and get pricing from each of them, or you can now go straight to ChooseEnergy.com and get real-time pricing and start saving money on your company's energy costs. This is the first and only website that allows you to compare commercial electricity prices, plus it does it in real-time. So you will know how much it is going to cost per kWh and how much you will save on an annual basis. VERY IMPRESSIVE SITE.

Many factors in electricity pricing and contracts are different from one provider to the next. Choose Energy makes it easy to understand and provides marketing material and contract and terms of service review for each provider. They are a division of the largest aggregator of private (commercial and industrial) electricity in the State of Texas - so these people know what they are doing. A good and qualified electricity broker will know what to look for and which REPs best suit your business electricity needs. ChooseEnergy understands the energy commodities markets and their impact on energy pricing, and provides you with market insight and planning and not just interested in giving you the best price now so they can make a sell. It is a neutral energy marketplace where you can get the contract that fits your company's needs.

Electricity brokers are similar to insurance brokers. They are knowledgeable in their field and can provide; energy saving tips, the electricity provider research (so you don't have to), and link you with the most appropriate electric company for your business needs. You want a broker that represents multiple REPs and is acting more as a consultant for your business rather than just a salesperson. Most brokers don't charge the customer for their service and are paid by the supplier for bringing in the customer. Successful brokers will learn more about your business' electricity needs, obtain competitive bids from multiple REPs, provide you with independent and objective energy consulting services and help you manage the challenges associated with energy procurement by presenting you with specific recommendations on electricity pricing and contract options. Electricity pricing is an extremely volatile commodity, switching REPs without the knowledge and research could actually cause you to pay more for electricity than the current Price to Beat. They will assist you with a smooth transition to a new electric provider and continue to monitor the markets on your behalf to make sure you are receiving a fair market rate on your electricity costs.

Your end goal is to secure the best providers, best contracts, best prices, and superior customer service for your business electricity needs. Since Texas is open to competition, Retail Electric Providers (REP) will compete for your business by offering lower prices than the affiliate REP, additional customer service benefits, or other incentives to earn your business. By switcing electric providers and following these simple

energy savings tips , you will see a much lower electricity bill in the coming months.

Large Commercial Electricity

Now that deregulation has been around in Texas for a few years, many large commercial or industrial customers that are coming off contracts are getting sticker shock in the form of electricity proposals and new electric bills. As you have probably seen in the news, natural gas prices have been rising steadily the past few years and this has had a dramatic increase in electricity prices for commercial customers. Choosing the right electricity provider is becoming ever more crucial to a company’s profitability. It requires industry knowledge to know the power and fuel trends, research to choose which complex pricing options make the most sense for your company, or which provider best fits your load profile. How do you research which providers are reliable or what to look for in the agreements you sign? Is this really the lowest price or did I overlook some fine print. Do I get a fixed long-term or short-term contract? What is an MCPE contract? Plus, with electricity pricing you can’t gauge whether or not you are getting a fair market price based on past experience or past prices because REPs design electricity pricing on an ever-changing market price of electricity that is based on your unique load profile and electricity usage. So you may want to look into doing business with a qualified electricity broker or aggregator. Is there an advantage in working with a broker of electricity? If you don’t have an energy manager on staff - Yes.

As a large user of electricity, we would recommend signing a short-term fixed contract because of the present high energy costs.

Should I sign an MCPE contract? Well, let’s take a look at MCPE. Market Clearing Price for Energy – “The highest price associated with a Congestion Zone for a Settlement Interval for Balancing Energy deployed during the Settlement Interval” (according to ERCOT’s -Electric Reliability Council of Texas- website). Electric providers are limited as to how much electricity they can purchase from the balancing market because of the risk associated with this market. Some retail electric providers have actually gone out of business because they purchased too much in the balancing market and were exposed to high swings in the market. So, do you want to purchase your company’s electricity from such a risky market? No.

As mentioned, there are many factors in electricity pricing, and contracts are different from one provider to the next. Contact a good and qualified electricity broker that knows what to look for and which REPs best suit your company’s electricity profile and needs. You need to look for a broker that has good relationships with MULTIPLE Retail Electric Providers, has accomplished personnel that understand the energy commodities markets and their impact on energy pricing, and provides you with market insight and planning. A good broker will want to keep you as a happy customer for a long time, so they will look after your best interest and monitor the market on your behalf.

Commercial Energy Saving Tips

Energy costs can have a significant impact on your company's bottom-line. Here are some Texas commercial energy saving tips.

Now that you have lowered your price of electricity by switching retail electric providers, let's focus on lowering your consumption of electricity. Have a service professional check your office air conditioning unit(s) before the summer heats up. Keep the office thermostat at 78 degrees or above. Every degree below 78 increases your cooling cost by almost 10%. Change your air conditioner filters every month. Weather-strip the outer windows and doors. Make sure you have a sufficient amount of caulk and weather-stripping around the windows and doors to keep the warm air inside the office. Lighting can be a huge cost factor in commercial spaces. You need to change out the incandescent light bulbs with fluorescent light bulbs. Fluorescent light bulbs use less electricity, last longer than incandescent bulbs, and will save you up to 25% on your lighting cost. If you have fans in the office -turn them on. Up to 70% of your summer electricity usage comes from your air conditioner. By turning on a fan, a room can feel up 5 degrees cooler. In the winter months, change the ceiling fans switches to a clockwise rotation. This allows the fans to bring the warmer air down. Keep your window blinds closed during the day. Closing the blinds allows less light and heat into the office, reducing the burden on your air conditioner.

The key to reducing energy costs is to make your business as energy efficient as possible. Follow these helpful steps and you will notice a dramatic change in your Texas electricity bills for the better.