Texas Deregulation Works When You Shop: Base Power's 19% Savings Expose Market Inertia, Not Low Rates

Base Power today announced Base Energy for Business, a fixed-rate commercial electricity offering in Texas, claiming pilot customers have cut bills by an average of 19% after switching^[1]. The pitch is clean: transparent pricing, no hidden fees, fixed rates without auto-renewal traps. But the 19% number tells a darker story about how deregulated electricity markets actually work, and who pays for inaction.

In a truly competitive market, all players should be priced to the same floor, and a new entrant's advantage would be thin. Instead, Base found that Texas businesses are deeply stratified: what a company pays "depends largely on when it last signed a contract, and many have not shopped their rate in years."^[1] This is not price discovery; it is price decay. The businesses paying the highest rates are not getting worse service or facing higher risk; they are simply not comparison shopping. In Texas's power-to-choose market, the default is loyalty, and loyalty is punished. Those pilot customers' 19% win is not free value creation; it is wealth transfer from the passive majority to the active few, enabled by the market structure itself.

The mechanism is simple: in a deregulated retail market, your supplier competes for your attention and contract renewal, but only if you solicit bids. If you do not, the supplier can hold your rate flat or escalate it modestly while raising rates on new customers less, banking the spread. Switching costs (time, hassle, paperwork) keep many customers stationary even as better deals appear. This is not a market failure in the economic sense; it is a market feature. The suppliers who profit most are not the most efficient; they are the most effective at capturing inattentive customers. Base's model, transparent rates and no auto-renewal surprises, does not fix the underlying problem; it simply attracts the segment of the market sophisticated enough to use a comparison tool.

The policy problem runs deeper. Texas deregulation was sold as a consumer empowerment story: give people choice, and competitive pressure will drive costs down to the marginal cost of generation and delivery, benefiting everyone. Thirty years later, the gap between the best and worst rates available to the same customer class in the same hour often exceeds 50%, and Base's own data shows it can reach 85% for two neighbors on the same street.^[5] That spread reflects not better technology or risk management; it reflects rent extraction from inertia. If the market were working, no customer would knowingly overpay by even 10%.

A genuinely deregulated market would require either perfect information (all customers know all rates at all times) or zero switching costs (move instantly, free, to the best deal). Neither exists. Default-rate renewal, bundled billing, and the sheer cognitive load of comparing hundreds of REPs create friction. Sophisticated businesses, and now Base's customers, overcome that friction. Most do not, and the suppliers know it. The 19% savings is real for those who switch; it is invisibly subsidized by those who do not.

For a business reading this: do not wait for Base to find you. Run your own bid. Collect your last 12 months of bills, extract your usage by month and by rate component, and send a request for quote to at least three independent REPs in your area. The difference between your current rate and the lowest quote is money your business is leaving on the table every month. If you are in Texas, ERCOT's deregulated market offers more options than most of the country; use it. If you are outside Texas, in a regulated utility territory, you have no such option, and your regulators are not under the same pressure to transparently justify rates, because you cannot leave. That is the hidden prize of deregulation: not lower rates universally, but the ability to pay less if you are willing to shop.