Deregulated Texas market cost consumers $28 billion more for electricity since 2004.

ENRON was just the beginning of a long road of what can now be called a “Texas discount”.
“Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to the Journal’s analysis of data from the federal Energy Information Administration.”

8 thoughts on “Deregulated Texas market cost consumers $28 billion more for electricity since 2004.

  1. WSJ’s headline is an attention grabber. A few points of perspective are in other.

    For one thing, deregulation is often sold to the public with the promise of lower prices. The promise, however, is imprecisely stated. The true benefit of deregulation is to free prices from the distorting effects that regulation can cause. When that happens, prices may either rise or fall. In this case, apparently, they rose. We should try to understand why.

    For another thing, Virginia also deregulated it’s wholesale electricity market in much the way Texas did, but with some variations. That’s how Dominion Energy replaced VEPCO on our electricity bills. VEPCO power generation facilities still exist, but as load service entities, not as part of a traditional state-regulated utility. Virginia consumers pay a bit more for electricity than Texas consumers (11.48 cents per kilowatt hour vice 11.44 cents in 2020). It would be interesting to know if Virginians have paid billions more for electricity the way Texans have.

    Finally, optimized, realistic prices are not the only benefit of deregulation. Another is competition that invites new market entrants, bringing innovation. This, plus generous tax breaks, is the opening that gave renewable technologies a chance to connect to the nation’s electrical grids. Under the traditional utilities model, renewables might still have been adopted, but much more slowly and with the same technical reliability risks they currently represent.

    Bottom line, deregulation and market forces are not the bogeyman they may appear to be.


    1. …”not as part of a traditional state-regulated utility”

      Then what is the SCC doing? And why does Dominion (or VEPCO) pay thousands of dollars in political donations (to members of both parties) to attempt to CONTROL how they are regulated?


      1. RE: “Then what is the SCC doing?”

        It is regulating Virginia’s electricity providers in a new way, not the traditional way it used to.


          1. If you want to believe that. I answered your question fairly. You can see my earlier post on capacity markets to understand the difference between traditional utility regulation and the new model.


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