Texas Electric Bills Were $28 Billion Higher Under Deregulation

[Greenbeard]

Policymakers in Texas have a lot to think about these days. As do Texas voters.

Texas Electric Bills Were $28 Billion Higher Under Deregulation

Texas’s deregulated electricity market, which was supposed to provide reliable power at a lower price, left millions in the dark last week. For two decades, its customers have paid more for electricity than state residents who are served by traditional utilities, a Wall Street Journal analysis has found.

Nearly 20 years ago, Texas shifted from using full-service regulated utilities to generate power and deliver it to consumers. The state deregulated power generation, creating the system that failed last week. And it required nearly 60% of consumers to buy their electricity from one of many retail power companies, rather than a local utility.

Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to the Journal’s analysis of data from the federal Energy Information Administration.

None of this was supposed to happen under deregulation. Backers of competition in the electricity-supply business promised it would lower prices for consumers who could shop around for the best deals, just as they do for cellphone service. The system would be an improvement over monopoly utilities, which have little incentive to innovate and provide better service to customers, supporters of deregulation said.

From 2004 through 2019, the annual rate for electricity from Texas’s traditional utilities was 8% lower, on average, than the nationwide average rate, while the rates of retail providers averaged 13% higher than the nationwide rate, according to the Journal’s analysis.

 

[Neomalthusian]

I think when you take something that needs to be a public good and try to privatize it, you're likely to get the opposite of the desired effect. Public goods need to be publicly funded. There should not be opportunity to gouge and profit when it comes to the provision of public goods.

 

[longview]

Policymakers in Texas have a lot to think about these days. As do Texas voters.

Texas Electric Bills Were $28 Billion Higher Under Deregulation

I am not sure that is accurate, as the traditional utilities would have increased their prices also.
As it stands, my rate is lower than what is was under HL&P.
While Texas does not have the lowest Electric rates, they are far from the highest, and many of those higher states
still have traditional utilities.
2020 Electricity Rates By State (Updated Nov 2020)

 

[Yakshi]

I am not sure that is accurate, as the traditional utilities would have increased their prices also.
As it stands, my rate is lower than what is was under HL&P.
While Texas does not have the lowest Electric rates, they are far from the highest, and many of those higher states
still have traditional utilities.
2020 Electricity Rates By State (Updated Nov 2020)

Not working out so well in terms of deaths per capita perhaps. In any case, I hope they fix their shit show soon.

 

[longview]

Not working out so well in terms of deaths per capita perhaps. In any case, I hope they fix their shit show soon.

Sometimes better communication is needed to make triage decisions.
It looks like in this case, they have identified the flaw, of not listing the natural gas pumping stations as critical resources,
(Those circuits exempt from the rolling blackouts.) I suspect (and really hope) this is the very first thing being corrected.

 

[Arlette]

I think when you take something that needs to be a public good and try to privatize it, you're likely to get the opposite of the desired effect. Public goods need to be publicly funded. There should not be opportunity to gouge and profit when it comes to the provision of public goods.

The system here worked exactly as it was designed to work. Deregulation and privatization leads to higher profits. Lawmakers in Texas know that as well as do lawmakers in DC

 

[longview]

The system here worked exactly as it was designed to work. Deregulation and privatization leads to higher profits. Lawmakers in Texas know that as well as do lawmakers in DC

My current fixed electric rate is less than I was paying when it was run by a monopoly.

 

[Rexedgar]

I think when you take something that needs to be a public good and try to privatize it, you're likely to get the opposite of the desired effect. Public goods need to be publicly funded. There should not be opportunity to gouge and profit when it comes to the provision of public goods.

Healthcare comes to mind.......

 

[Omniscient]

I think when you take something that needs to be a public good and try to privatize it, you're likely to get the opposite of the desired effect.

privatization is right wing idealism

sounds good but doesnt work because humans are greedy as fuk

the corporation is just as, if not more, likely to enslave you then your democratically elected politician

 

[KLATTU]

privatization is right wing idealism

sounds good but doesnt work because humans are greedy as fuk

Socialism and Communism don't work for the same reason. Although I wouldn't word it that way. I'd say the systems that purport to serve the common good don't work because humans act in self interest.

 

[Omniscient]

Socialism and Communism don't work for the same reason. Although I wouldn't word it that way. I'd say the systems that purport to serve the common good don't work because humans act in self interest.

capitalism is dependent upon socialism for survival

humans acti n self interest sometimes.

other times they act in others interest

and calling socialism communism is a logical fallacy

 

[KLATTU]

capitalism is dependent upon socialism for survival

YOu have it exactly backwards.

where do you think the money comes from to pay for all the big government programs?

 

[Omniscient]

YOu have it exactly backwards.

where do you think the money comes from to pay for all the big government programs?

of course

they are dependent upon each other

like ying and yang

 

[Razoo]

Deregulation is very BIG GOVERNMENT run wild.

Privatization is corporatization = BIG GOVERNMENT = Fascism

 

[Antiwar]

YOu have it exactly backwards.

where do you think the money comes from to pay for all the big government programs?

Taxation. And taxation is socialistic.

 

[Stealers Wheel]

There are numerous examples of "socialism" that conservatives are perfectly happy with.

The Interstate Highway system is one. Paid for by taxes, those roads make it possible to get the capitalist's goods to market faster.

Another is government subsidized drug research. There's no point in putting your own money at risk when the taxpayers' will do just fine.

NASA and NOAA. No profit so the government had to do the heavy lifting.

I could go on, but the point is made.

 

[Joby]

My current fixed electric rate is less than I was paying when it was run by a monopoly.

This criticism of Texas' deregulation is really missing the forest for the trees. Yes, lower rates due to added competition was a benefit of deregulation touted at the time but it was far from the only benefit.

At the turn of the century the Texas power grid was already needing investment in new generators while simultaneously multiple power plants were due to retire. When natural gas prices skyrocketed prior to fracking (2000-2005ish) many of the ancient HL&P plants -which were specifically designed to sacrifice efficiency to burn as much gas as possible, having been built when HL&P was paid to take what was considered an oil refining waste product at the time- left customers hurting regardless of being regulated or not.

Because of deregulation Texas has been able to attract enormous amounts of investment into their power grid without having to spend a dime of public money. If it were its own country Texas would now be #5 in the world for wind power due almost solely to private investment that has occurred since deregulation. The only reason this system works is because generators are able to sell their power competitively on the open market. (And obviously, it only works when there's not an Enron skewing that market by turning generators off and creating artificial shortages)

The era of HL&P owning their own power plants, transmission lines, and finally down to captive customers who can't leave their monopoly is long gone and it's hard to see it ever coming back.

 

[MTAtech]

Policymakers in Texas have a lot to think about these days. As do Texas voters.

Texas Electric Bills Were $28 Billion Higher Under Deregulation

Somebody got a briefcase full of cash.

 

[skeptic llc]

So when a crisis hits, private industry thinks "How can we manipulate this to maximum financial advantage at the expense of our customers and the government"? And the government thinks "It's 5:00, time to go home." Not a great choice, but I'll take the government that at least tries to serve the common good when it's not a minute outside business hours and time to go home.

 

[longview]

So when a crisis hits, private industry thinks "How can we manipulate this to maximum financial advantage at the expense of our customers and the government"? And the government thinks "It's 5:00, time to go home." Not a great choice, but I'll take the government that at least tries to serve the common good when it's not a minute outside business hours and time to go home.

I do not think that worked that way this time! Quite a few of the electrical providers went out of business, it was they who mostly
could not pay the bill. A few companies were offering spot price consumer electrical plans, and the customers got burned who had those
plans, but the vast majority of Texas electrical plans are fixed price, somewhere between $.08 and $.15 per KWh.
The company assumes the risk, of a spike in the spot market prices.
P.S. The company who had pushed the spot price contracts, can no longer do business in the Texas Grid!