Capacity markets have picked up a large but unusual collection of opponents. They range from your free market think tanks like TPPF, all the way to environmentalist groups, consumer advocates, large manufactures, and small businesses.
League City recently joined the fight when its council passed a resolution that formalized its opposition to the re-regulation of the Texas electricity market. In its resolution, the Council makes an impassioned case against a “capacity market” and corporate subsidies for energy generators while voicing many of the concerns that the Foundation has expressed in its research.
For instance, the Council notes the high cost capacity markets would impose on their resident’s energy bill:
“[A] capacity market would force ratepayers to pay for the total generation capacity available, whether or not it is needed or economically viable, at an annual cost of $3 to $5 billion per year, added to the existing $9.5 billion transition cost.”
“League City residents would pay more for electricity in a capacity market.”
In addition, the Council objects to the precedent of an unelected regulatory body imposing such a high tax on Texas consumers, especially when the move towards competition came from the Texas Legislature.
“[T]he Public Utility Commission is an unelected regulatory body, while electric competition was passed by the people’s representatives in the Texas Legislature.”
“The City Council of League City opposes any attempt for the Public Utility Commission to re-regulate the electricity market in the State of Texas, as any proposal to change the regulatory structure of the electric market should arise out of the Texas Legislature, and not an unelected regulatory authority.”
Capacity markets have proven to be expensive, inefficient, and anti-competitive everywhere they’ve been introduced. League City is right to doubt that Texas would be the one exception to this track record.