Recommendations
Recommendations for a More Competitive Electricity Market
TCAP members are committed to making electric deregulation work. Affordable power in a fully competitive market means economic development for our communities and a better life for our citizens. But competition does not simply develop once regulation is abandoned. The Texas Coalition for Affordable Power proposes the following reforms to help transform the deregulated market in Texas into a truly competitive one.
Enhance Protections Against Anti-Competitive Activities in the Wholesale Market
Anti-competitive behavior should be prohibited in the wholesale energy market, and legal loopholes that exempt some generators from prosecution should be closed. The submission of “hockey stick bids” and anti-competitive practices prohibited in other states by the Federal Energy Regulatory Commission should be outlawed in Texas. Penalties for anti-competitive activities should be increased. When market power abuses occur, market participants harmed by such anti-competitive activities should be given the right to participate in investigations and enforcement actions undertaken by regulators.
Avoid Changes in the Market Structure that will Increase Wholesale Costs
Policymakers should look for ways to stimulate growth in generation resources other than through price supports and subsidies that are inconsistent with the principles of competition and a free market. Policymakers should reject all proposals for “capacity markets,” in which generators get paid even when they do not operate. This will only add to consumer bills.
Reduce Confusion in the Retail Electricity Market
Texas electricity consumers should have access to uniform, standard-offer products. These will help reduce confusion in the retail electricity market and allow for apples-to-apples comparisons in pricing deals. All retail electric providers should be required to promote the powertochoose through a printed notice on home electricity bills.
Increase Oversight of ERCOT
The PUC should increase its oversight of ERCOT’s finances, both by approving all annual budgets for the organization and by pre-approving all uses of debt by ERCOT.
Re-regulation is Not the Answer
Policymakers should strive to make the state’s deregulated electricity system as efficient and fair to Texas consumers as possible. Re-regulation is not the answer. Instead, the Public Utility Commission should pursue a balanced approach with regards to the state’s electricity market. Consumer protection should have equal footing with the promotion of competition.
