A bum steer: deregulation in Texas

August 28, 2013

Everything’s bigger in Texas – except energy capacity.

Deregulation in Texas has sometimes been touted as a success. But has it really been?

Not according to the San Antonio Express-News, where generation capacity is concerned: “Deregulation has had the unintended consequence of discouraging the building of new power plants, leaving the state’s power supplies vulnerable as Texas continues to grow.”

In fact, prior to deregulation, the state had the best electric power reserves. Now, only 12 years after deregulating, it has the nation’s worst, which could result in rolling blackouts during summer heat waves, according to the North American Electric Reliability Corp. Today, Texas is struggling to find ways to encourage construction of new generating plants.

And as heat waves roll in, without enough power, it’s up to the customers to either conserve energy or face blackouts.

Meanwhile, municipally owned power companies in San Antonio and Austin, which were not affected by deregulation, maintain surpluses in both generation and customer satisfaction.

J.D. Power and Associates ranks San Antonio’s CPS Energy, the largest municipally owned utility in the country, at No. 1 among large utilities in the South for customer satisfaction and electric reliability. What’s more, CPS Energy is on track to save 770 megawatts of power for this year—all while providing its customers with some of the lowest on average energy rates in the country.

On the other hand, a new report from the Texas Coalition for Affordable Power says Texans in deregulated areas paid $10 billion over the national average for power over the past decade. The costs of deregulation literally have Texans paying the price.