Houston Chronicle Explores Texas Power Market Problems, Fixes

Michael Giberson

The Houston Chronicle‘s Tom Fowler and Janet Elliot have a pair of articles on the Texas power market restructuring experience and current talk about reforming state policy.

From the lede in Sunday’s “Many Texas consumers feel competition in the state’s energy markets has been a costly failure“:

When Texas lawmakers agreed to open the state’s power markets to competition back in 1999, one promise was on the tip of many tongues — lower prices.

“Competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices about the power they use,” then-Gov.
George W. Bush said at the time.

Then-state Sen. David Sibley, who was a key author of the bill, put the promise more bluntly:

”If all consumers don’t benefit from this, we will have wasted our time and failed our constituency,” he said.

Eight years later, many consumers are calling deregulation just that — a failed waste of time.

From Monday’s “Market fix rests on bright ideas“:

Many in the industry say the market is working, particularly for customers willing to shop for the best rates. Two of the state’s top three political leaders, House Speaker Tom Craddick and Gov. Rick Perry, share that view.

“As other markets and states face population and electric usage increases, Texas’ electric market will continue to prove the model for other states to emulate,” Craddick said recently.

The third member of the state’s top leadership, Lt. Gov. David Dewhurst, says the state’s power markets need some tweaking to encourage greater competition.

“At the same time, I don’t want to dramatically re-regulate the industry,” Dewhurst said, without elaborating on what measures he believes might stimulate competition.

But some consumer groups and elected officials say the higher rates for residential customers — particularly the poorest Texans — require more drastic measures.

“Yes, you can put the genie back in the bottle,” said Rep. Sylvester Turner, a Houston Democrat who is suggesting a return to price controls for residential and small business customers. “If you can deregulate, you can regulate.”

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