John Bick makes his living by tracking energy prices, so he knows how to play the

game. In July, when natural gas prices dipped, he locked in a low rate for electricity

for the next year, and he's saving $87 a month on his Arlington home's electric bill.

Sounds like a no-brainer, but he's taking a risk.

In January, the Texas electric market deregulates fully, ending the price-to-beat benchmark used by TXU

in North Texas. Some analysts believe that retail rates could drop sharply then, and Bick's good deal may

not look so good anymore.

"So what?" he said. "I'll just pay the cancellation fee and make a switch."

The fee is $150, a hit that would discourage most consumers. But Bick's calculation is straightforward: If

he can cut a few pennies off his rate, he'll make up the penalty in a few months.

You don't have to be an energy consultant to make this kind of hard-nosed assessment. Just accept the

notion that managing energy costs is another modern burden -- and opportunity -- akin to managing a

401(k) or a healthcare savings account.

Most of us monitor gasoline prices, airfares and stock-market returns, and we regularly research the

Internet for good deals. We need to adopt the same mind-set for electricity, especially with summer bills

topping $400.

This is not as easy as zipping through three or four Web sites to buy a plane ticket. The fine print is

voluminous, the learning curve is fairly steep, and entrepreneurs are still developing tools to simplify the

comparison process.

But the basic concept is the same as with most big purchases: Learn how the electric market works. Shop

around frequently. And keep an eye on bigger trends, because a better deal may surface -- and you can't

count on the current provider to tell you about it.

That doesn't mean there are real bargains out there today. In North Texas, residential rates are among

country's highest, and we're paying 50 percent more than customers in Austin and other cities with

municipally owned utilities.

TXU, meanwhile, is making huge profits. The utility benefits because its benchmark rate was set soon

after Hurricanes Katrina and Rita. Natural gas prices have fallen since then, but TXU has no obligation to

ask regulators to lower the figure.

So the benchmark rate is about 15 percent higher than it ought to be.

how it was supposed to work, but retailers seem comfortable with fatter margins.

What can consumers do? Get more informed and more active. Most know their car's gas mileage, but how

many know their electric rate?

The private sector can start rolling out innovations, such as more-detailed Web sites and ways to combine

residential customers so they have more buying power.

And cities may have a function; in other states, they have been important aggregators, combining

thousands of residents into a single buying group.

When these pieces come together and the price-to-beat benchmark goes away, maybe we'll see more real

competition for residential customers.

Big companies have capitalized on the Texas system since deregulation began in 2002. They have more

motivation to manage energy costs because their bills are so high, and brokers quickly pitched moneysaving

proposals.

Power providers are also willing to cut deals with big users. In contrast, a single homeowner gets the

retail price only.

Maybe that's why 70 percent of the commercial power load in Texas has changed providers at least once,

while just 30 percent of residential users have switched.

Bick, a former TXU executive, jumped into the deregulated marketplace as a consultant to big companies.

At Priority Power Management, he advises companies on locking in rates, changing providers and other

strategies to reduce costs.

The company has about 700 clients, including the City of Midland, Doskocil Manufacturing in Arlington,

and Hillwood, the giant real-estate arm of Ross Perot Jr.

Because Hillwood wants to support renewable energy sources, all the electricity it buys is generated from

wind power. That's a laudable goal. Hillwood is paying the same for wind power as it would for

electricity from traditional sources. That's the deal a company can get when it spends $730,000 a year on

electricity and uses a consultant to leverage its position.

Residents who want to use wind power, however, have to pay 24 percent more than the lowest rate now

available in North Texas.

"If we'd done nothing at all, we'd be paying the going rate," says Tom Harris, Hillwood's senior vice

president of operations and administration. "But even with some expertise, it's a bit of a guessing game."

For one corporate customer, Bick recommended an exotic hedging strategy: Lock in the rate for plant

capacity and the retailer's margin, and let the price of natural gas float. That customer has saved $460,000

so far this year, Bick said, because natural gas prices have trended down.

This is a level of sophistication that's beyond most residential customers. Even if they knew about this

approach, they don't buy enough power to justify the arrangement.

Maybe middlemen could do it, though, and Bick's firm has ventured into that territory. This summer, it

launched a Web site, ChooseEnergy.com, that offers electric deals to residential customers.

It competes with powertochoose.com, the state-sponsored site that lists all the electric retailers. Other

shopping sites have emerged, including saveonenergy.com and electricitytexas.com.

Bick's site has a unique wrinkle: Rates are set in real time.

If there's a drop in natural gas prices, providers can change the rate that morning, and consumers can

jump on the deal immediately. The state site, in contrast, says the lag time can extend for 48 hours before

rates are changed.

This isn't much of an advantage if energy companies don't respond quickly to shifts in natural gas and

consumer demand. But the hope is that eventually, these forces will push retailers to be more aggressive

in their pricing.

Choose Energy also adjusts for a resident's usage. Many people don't realize that some providers cut their

hourly rate at 1,500 kilowatts a month and at 2,000. As a result, one offer may be better than it appears on

the state site, where usage is assumed to be 1,000 kilowatts a month.

Bick, who's president of Choose Energy, plans to add an e-mail service to alert consumers if natural gas

prices fall or a retailer offers a discount promotion. In theory, the site could negotiate the complex trading

schemes that Bick works out for corporate clients, making them available to a larger group.

Another area ripe for innovation: bundling residential customers who are willing to ration their power in

the late afternoon. That's when demand is greatest, and many residents would accept some restrictions if

the savings were sufficient.

These are the types of ideas that have to flourish if Texas is going to find ways to get power for less.

Consumers can't do it alone, but they have a big role to play.

The frustration is that competitors aren't slashing their prices to lure away thousands of customers. That's

how it was supposed to work, but retailers seem comfortable with fatter margins.

Mitchell Schnurman, 817-390-7821 schnurman@star-telegram.com