CPS Energy, San Antonio's city-owned electricity utility, announced last week that it will close a coal-fired generation plant in 2018–well before the end of its useful life. Despite claims by generators of low profits due to Texas' competitive market, though, CPS is closing the plant because of federal regulations–not a failing market.
CPS would have been required by the U.S. Environmental Protection Agency to spend $500 million on pollution control devices to keep the 871-megawatt power plant open. So instead, it bought a natural gas-fired power plant and is closing down a perfectly good source of low-cost electricity for Texans.
If you take environmental regulations like this and add subsidies for for renewable energy and energy efficiency, excessive regulation by the Public Utility Commission of Texas, and some poor management of congestions costs on the grid, it becomes crystal clear that government intervention–not the free market–that is causing the most reliability challenges in the texas market. Yet the PUC appears to be moving ahead with plans to shut down Texas' world class, competitive electricity market.