Does Texas have it right? (And "traditional" states have it wrong.)

By Jesse Berst

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It has taken a while, but more and more observers are calling the Texas "experiment" with retail competition a success... and even suggesting it may be a model for the rest of the country. In Texas, "wires" companies such as Oncor and Centerpoint are responsible for maintaining the infrastructure and for creating a platform on which electric power retailers can deliver a range of offers and services.

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Although it took a while for competition to show its merits, today prices are roughly 30% lower than before. Equally important, Texas consumers now have a wide range of choice. They can lock in rates for extended periods of time, buy power from green sources, get extra benefits for agreeing to demand response and much more.

Is this the best model for the world? Regulated companies run the grid in behalf of everyone, offering equal access to power retailers who compete for the customer. That competition typically creates dozens of different "bundles," giving customers the chance to find the program best suited to their wallet and lifestyle.

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And if Texas is doing it right, what will it take to bring other states around to this model? Several other states have full or partial competition, but at least three fourths are still stranded in the last century.

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That's our Tuesday Topic this week; jump to the discussion forum to join the conversation (and see what insiders are saying).

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Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.