Feel like you”re paying too much for electricity? If you live in Texas, you”re probably correct. Just consider the above chart, which is taken from easy-to-find data posted at the United States Energy Information Administration website. It shows that within the continental United States, only residents of Massachusetts have suffered greater rate hikes.
Specifically, the chart compares electric prices in 1999, which is the year that Texas adopted its deregulation law, to electric prices in 2008, which is the last year for which the federal government has complete annual pricing data. The chart includes pricing data for all states within the continental United States and the District of Columbia.
The first startling fact: only Massachusetts has had larger price increases than Texas. And remember, this is for the period after Texas adopted its deregulation law. Far from keeping a lid on prices, deregulation in Texas appears to have made prices worse.
The second startling fact: price increases in Texas exceed even those among deregulated states generally. Note the second green bar. That”s the average rate increase only among deregulated states. The average increase in Texas is far greater. This would suggest that the Texas deregulation law has been less successful than deregulation elsewhere.
Here”s the third startling fact: electric prices also have increased more in Texas than they have in other states with a similar reliance on natural gas to fuel generation plants. Many proponents of the status quo have blamed high electric prices in Texas on natural gas price volatility. But this data suggest the current system is exacerbating that effect, not making it better.
The Cities Aggregation Power Project supports those reforms that enhance competition while improving customer protection. Texans can and should pay less for electricity.
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.