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 retail electricity 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 electricity 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 electricity 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