Texas Electricity Prices Are Lower Due to Deregulation

Source: American Institute for Economic Research.

This story may be of some interest because it critiques a WSJ item that was the subject of a post here in the Forum.

https://tidewaterforum.blog/2021/02/25/deregulated-texas-market-cost-consumers-28-billion-more-for-electricity-since-2004/#comments

My own critique of WSJ’s piece addressed other factors and simply noted that if Texas electricity prices had risen after deregulation we should try to understand why. The present critique takes up the pricing question directly to reach the conclusion stated in the headline.

Rather than a source of failure, deregulation of Texas electricity markets was an actual success to the extent that lowering prices was the objective. One might argue, of course, that lower prices are an insufficient benefit, but that discussion belongs in a different conversation.

13 thoughts on “Texas Electricity Prices Are Lower Due to Deregulation

  1. Speaking of poor regulating…

    Important news.

    If you are scheduling a covid vaccine with CVS, and you get to the scheduling page then, obviously, schedule your appointment.

    After you schedule your appointment, DO NOT CLOSE THE PAGE! Instead hit REFRESH, and you can schedule another immediately.

    Do this as many times as is necessary for all your friends too. But you will need to get them on the phone while you do it. Lots of info needed

    Liked by 1 person

  2. The expected cost of the Texas disaster, not counting deaths just dollars, is on track to be the worst in Texas history, probably over $20 Billion. Add in the destroyed homes, emotional tolls and years of recovery for many, the competitive edge is gone.

    It could also be that because no investments made in protecting the power supplies for inclement weather helped “lower” the prices.

    In any case, the disaster was preventable if warnings from previous cold snaps were heeded.

    IMHO

    Liked by 2 people

    1. RE: “In any case, the disaster was preventable if warnings from previous cold snaps were heeded.”

      They were heeded. As documented here in the Forum, Ercot requested Federal approval to expand generation capacity in advance of the storm. The risks were known and solutions were in hand. Also, thanks to reasonably effective technical management during the storm, restoration of services took days, not months.

      Like

      1. They were heeded? You mean that thermal protections were installed on all power supplies and delivery systems?

        Really?

        What you are saying, I believe, is that early shut down prevented destroying generators. Not that power was available.

        That is like saying the boat fire was extinguished when it sank since the fire extinguishers were absent or inoperable.

        Liked by 2 people

        1. RE: “You mean that thermal protections were installed on all power supplies and delivery systems?”

          No. That wasn’t necessary as a technical matter because the grid had alternative sources of supply as well as existing best practices for responding to system failures. Point being the problems you think were not anticipated actually were. Moreover, the solution that would have made you happy was not necessarily the best one.

          See the Forum post Order No. 202-21-1 for details.

          Like

          1. “That wasn’t necessary as a technical matter because the grid had alternative sources of supply as well as existing best practices for responding to system failures.”

            That went well, didn’t it?

            Thousands, if not millions of severely damaged or even destroyed homes might have issues with the “best practices”.

            Liked by 2 people

          2. RE: “That went well, didn’t it?”

            Maybe the problem is that your expectations are unreasonable.

            Like

          3. …”the problems you think were not anticipated actually were.”

            Proper weatherization of ALL sources of electrical generation was NOT accomplished. To say that the problems weren’t anticipated and properly planned for is a dodge trying to give cover to those electric companies who failed to prepare their systems for any scenario, including a worst case one.

            Like

          4. “Maybe the problem is that your expectations are unreasonable.”

            My expectations are that the power companies provide power and that they are able to operate when the weather is cold. Outages from downed lines are understandable and unavoidable so long as we string lines from poles. But those are sporadic and random. When the whole state goes down because of frozen supply lines that have frozen before, I have a complaint.

            In actuality, of course, Texas is not my problem other than I sympathize with the residents.

            Except, of course, for El Paso which decided to join the grid among other issues that helped them escape the failures.

            Liked by 1 person

          5. RE: “My expectations are that the power companies provide power and that they are able to operate when the weather is cold.”

            That’s exactly what I meant. Maybe the problem is that your expectations are unreasonable.

            Like

  3. Hmmm. I keep seeing Dominion Power full-page ads in the newspaper touting that the rates in VA are 10% lower than national average.

    Regulation can still work without breaking the home and business owner’s bank.

    Like

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