Last week, the Austin American-Statesman commented on a report done by
the Cities Aggregation Power Project (CAPP). “A History of Electric
Deregulation in Texas” provides selective data to support the claim that
deregulation has hurt consumers rather than helped them.
For example, the CAPP report states that the average residential price
of electricity increased from 7.55 cents in 1999 to 12.41 cents in 2007.
However, the Texas energy market did not begin the transition into
deregulation until 2002, and full deregulation only took place as of
January 1, 2007. So the data provided by the CAPP report is mostly from
a period of time where deregulation had not yet begun or had not taken
full effect. Additionally, this is 2009, not 2007. The report relies on
data more than a year old and totally ignores more recent changes in
prices.
Although electricity deregulation has not contributed to an increase in
prices, it has contributed to an increase in consumer choice. In January
of 2002, there were about “17 rate plans offered by four retail electric
providers.” By January of 2007, consumers could chose between about 100
rate plans and 28 providers. This competitive Texas energy market has
not only given consumers more choices, but it has also released them
from a monopoly-dominated market with only five electric providers.
Yes, Texas energy prices are high, but prices are high everywhere. Texas
is among the five largest states in America; we rank in the middle of
that group in average residential retail electricity prices. Overall,
deregulation has helped Texas electricity consumers by opening the
market up to competition, boosting consumer choice, and at least holding
the line on prices.
Emma Pickering http://www.texaspolicy.com/legislativeupdates_single.php?report_id=2446
Texas Energy
