Retail Unbundling - Texas

Status: The state has no active residential customer choice programs, but some municipalities have formed cooperative arrangements with their local distribution companies (LDCs).

Overview: Although there are no unbundling programs for residential and small-volume commercial customers, several communities in Texas have acted to provide their residents with gas cost advantages. Texas is somewhat unique in that the Railroad Commission of Texas (RRC) has jurisdiction over intrastate transportation city gate sales for resale and retail rates outside of city limits, but individual communities and municipalities regulate retail natural gas service within their boundaries. As a result, some communities are forming innovative arrangements with their LDCs. In one case, the City of El Paso and Southern Union Gas Company have made arrangements to minimize the volatility of spot market gas prices during the heating season. Under the arrangement, the city's natural gas prices will be locked in as of November 1, and be effective throughout the heating season. In another case, the City of Odessa arranges the purchase and delivery of the city's gas supply to the city gate, at which point Energas Company distributes the gas to the customers. In this case, the City of Odessa acts as a cooperative for its residents by shopping for competitively-priced gas and transportation service. Most of the state's industrial customers are served through direct connections to intrastate pipelines and therefore have long had the ability to purchase natural gas from nonutility suppliers.

EIA State Data: In 2002, Texas had 3,806,303 residential and 317,311 commercial customers. They consumed 210 and 186 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies by residential and commercial customers were $7.28 and $5.49 per thousand cubic feet, respectively.

File last modified: 01/31/2004