It’s the New Year, which means it’s time again for the annual ABACCUS report.
Formally known as the “Annual Baseline Assessment of Choice in Canada and the United States,” ABACCUS is a weighty-looking tome that purports to rank deregulated electricity markets nationwide. The 149-page analysis was released January 22nd.
The good news is that ABACCUS again names Texas as number one among deregulated markets nationwide. The bad news is that the ABACCUS is a flawed report, one that fails to adequately account for electric affordability.
That’s a shame. We at the Texas Coalition for Affordable Power want the deregulated market to work. Texans deserve the best possible market — we should strive to be number one. But it’s hard to adequately judge the strengths and weaknesses of our market without examining how it impacts people. When Texas deregulated retail electric service in 2002, it was with the promise that consumers would get better deals.
But the report authors, after boasting that “the hallmark of the ABACCUS methodology is the breadth of the issues explored,” fail to adequately account for affordability. Perhaps this isn’t so surprising given that the ABACCUS is not an unbiased academic study, but rather created for and by the electric industry. This year’s report is sponsored by TXU Energy, Bounce Energy, Direct Energy and others.
Had the ABACCUS authors adequately accounted for affordability, they might have noted that average electric prices in deregulated areas of Texas have improved in recent years, but nonetheless have remained stubbornly higher than electric prices in areas exempt from deregulation. These were the findings of a recent TCAP report about electricity prices in Texas.
Here are some other facts missed in the ABACCUS analysis:
• Had Texans in deregulated areas enjoyed the same lower prices as Texans living outside deregulation, the savings in deregulated areas over the last decade would have exceeded $20 billion.
• Over the last decade, a typical Texas electricity customer in deregulated areas of the state would have paid more than $4,000 more for power than a typical Texan living in an area exempt from deregulation.
• Residents in Texas continue paying substantially more for electricity than residents in Louisiana, Oklahoma and Arkansas.
It’s clear from even a cursory examination of the available data that Texans should be enjoying greater benefits from the deregulated market. The good news is that prices have been trending in the right direction and that reform is possible. But we can’t make a fix without first acknowledging that there’s more work to be done.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.