Texas competitive market working despite opponents claims otherwise
Theyre back!!! They" being those in the Legislature who would like to reregulate the electric power industry for 85 of Texans which being such a large proportion is why many question the validity of their efforts.
Opponents of deregulation and free market principles have focused on two methods to control pricing in the electric market. The first method is to allow for municipal aggregation through local elections. The second method is to reregulate the electric market.
Groups working for both goals are coordinating their efforts through enemies of conservatives business and free enterprise principles.
A coalition of more than 100 Texas cities called the Cities Aggregation Power Project or CAPP is pressing for changes in the states 10-year-old electricity deregulation law. The coalition claims the landmark statute has contributed to spiraling electricity prices abuses in the wholesale power market and reduced profits for businesses.
The Lloyd Gosselink law firm represents the coalition and also represents the municipalities around the state involved with the Texas Municipal League. The Texas Municipal League consistently opposes tax limitations and reform and has advocated for increases to sales and property taxes.
CAPP comprises 103 cities that collectively negotiate for the electricity rates of their municipal operations. Under deregulation the cities residents buy electricity individually.
An recently released 82-page study by CAPP interpreted & presented just one side of the impact of 10 years of deregulation in Texas. While the report blamed deregulation for increased Texas electricity prices at rates allegedly well above the national average coalition leaders said they are more interested in improving the law than repealing deregulation.
Not surprisingly business groups disputed CAPPs findings saying the cities released the study to build support for their goal of eventually buying bulk-rate electricity on behalf of their residents. Subsequently those residents would be slammed" into the citys electricity providing system unless they make the pro-active effort to either opt-out" or select another provider such as their current electric supplier which they most likely are quite comfortable with.
State Representative Jim Keffer has authored legislation House Bill 2780 to allow cities to buy bulk power on behalf of their residents.
Under this legislation cities would hold local elections calling for the city to negotiate on behalf of their residents electric utility contracts. Even if a resident voted against the local election if the measure passed the resident would be switched or as more commonly called slammed" to the provider and price selected by the city.
Some quite accurately refer to this method as government sponsored slamming of electric providers and prices.
The bill has been referred to the House Committee on Energy Resources chaired by none other than Keffer himself.
Keffer has sponsored this legislation before in the form of a bill and amendment in 2005. His amendment was soundly defeated with more than 100 votes against it in 2005.
And a recent study by the Texas Public Policy Foundation (TPPF) however found Texas to have the lowest electricity prices in the nation following a complete market deregulation.
Never allowing the facts to get in the way of their goal a few Texas legislators nonetheless have introduced bills that would reregulate areas around the state. Supporters of the bills believe deregulation decreases electricity reliability and accelerates loss of jobs.
Facts and independent analysis prove otherwise.
State Representative Yvonne Davis introduced House Bills 1836 and 1837 in late February calling for the Public Utility Commission to (i) place a cap on prices for fixed rate contracts (ii) place a cap on the electric retail price at a fair price" and (iii) allowing transmission and distribution utilities or power generation companies to purchase one another and offer electric retail service at a regulated price.
These bills have been referred to the House Committee on State Affairs and have yet to receive a hearing.
Members of the Legislature expect both Senate and House Democrats to look for a way to force a vote on these measures in hopes to benefit politically in elections next fall.
Conservatives have all the facts at hand to bolster their support of the current market.
A study by Robert Michaels a senior fellow at TPPF and an economics professor at California State University-Fullerton titled Competition in Texas Electric Markets: What Texas Did Right and Whats Left To Do studies Texas transition from a regulated market to a competitive electric market.
During the four months it took to produce the study Michaels looked at characteristics of a competitive market and said he found all three basic characteristics in post-deregulation.
Since day one of the deregulation Michaels said there has been price competition allowing customers to switch suppliers. New plants give customers steady prices and companies present customers with new innovations in rates and services he said.
Customers also have more of a choice on where to get their electricity. Texas is probably the greatest success in retail markets in probably the world Michaels said.
Senate Bill 7 which passed in 1999 opened the electric retail market for deregulation in areas not served by an electric cooperative or municipality. This which is about 85 percent of the state.
The reason these ideas on bulk power purchasing by cities and reregulation of the market have been rejected is fairly simple. In most parts of the state there are lower competitive prices today than when prices were regulated. One could wisely conclude that this should & could continue if left in place.
The PUC and Association of Electric Companies of Texas provide information to support this claim through their offices or websites. You can follow these links for more information www.puc.state.tx.us and www.aect.net.
The Texas competitive market is working even if opponents of business and free markets think otherwise.
Texas competitive market working despite opponents claims otherwise
Theyre back!!! They" being those in the Legislature who would like to reregulate the electric power industry for 85 of Texans which being such a large proportion is why many question the validity of their efforts.
Opponents of deregulation and free market principles have focused on two methods to control pricing in the electric market. The first method is to allow for municipal aggregation through local elections. The second method is to reregulate the electric market.
Groups working for both goals are coordinating their efforts through enemies of conservatives business and free enterprise principles.
A coalition of more than 100 Texas cities called the Cities Aggregation Power Project or CAPP is pressing for changes in the states 10-year-old electricity deregulation law. The coalition claims the landmark statute has contributed to spiraling electricity prices abuses in the wholesale power market and reduced profits for businesses.
The Lloyd Gosselink law firm represents the coalition and also represents the municipalities around the state involved with the Texas Municipal League. The Texas Municipal League consistently opposes tax limitations and reform and has advocated for increases to sales and property taxes.
CAPP comprises 103 cities that collectively negotiate for the electricity rates of their municipal operations. Under deregulation the cities residents buy electricity individually.
An recently released 82-page study by CAPP interpreted & presented just one side of the impact of 10 years of deregulation in Texas. While the report blamed deregulation for increased Texas electricity prices at rates allegedly well above the national average coalition leaders said they are more interested in improving the law than repealing deregulation.
Not surprisingly business groups disputed CAPPs findings saying the cities released the study to build support for their goal of eventually buying bulk-rate electricity on behalf of their residents. Subsequently those residents would be slammed" into the citys electricity providing system unless they make the pro-active effort to either opt-out" or select another provider such as their current electric supplier which they most likely are quite comfortable with.
State Representative Jim Keffer has authored legislation House Bill 2780 to allow cities to buy bulk power on behalf of their residents.
Under this legislation cities would hold local elections calling for the city to negotiate on behalf of their residents electric utility contracts. Even if a resident voted against the local election if the measure passed the resident would be switched or as more commonly called slammed" to the provider and price selected by the city.
Some quite accurately refer to this method as government sponsored slamming of electric providers and prices.
The bill has been referred to the House Committee on Energy Resources chaired by none other than Keffer himself.
Keffer has sponsored this legislation before in the form of a bill and amendment in 2005. His amendment was soundly defeated with more than 100 votes against it in 2005.
And a recent study by the Texas Public Policy Foundation (TPPF) however found Texas to have the lowest electricity prices in the nation following a complete market deregulation.
Never allowing the facts to get in the way of their goal a few Texas legislators nonetheless have introduced bills that would reregulate areas around the state. Supporters of the bills believe deregulation decreases electricity reliability and accelerates loss of jobs.
Facts and independent analysis prove otherwise.
State Representative Yvonne Davis introduced House Bills 1836 and 1837 in late February calling for the Public Utility Commission to (i) place a cap on prices for fixed rate contracts (ii) place a cap on the electric retail price at a fair price" and (iii) allowing transmission and distribution utilities or power generation companies to purchase one another and offer electric retail service at a regulated price.
These bills have been referred to the House Committee on State Affairs and have yet to receive a hearing.
Members of the Legislature expect both Senate and House Democrats to look for a way to force a vote on these measures in hopes to benefit politically in elections next fall.
Conservatives have all the facts at hand to bolster their support of the current market.
A study by Robert Michaels a senior fellow at TPPF and an economics professor at California State University-Fullerton titled Competition in Texas Electric Markets: What Texas Did Right and Whats Left To Do studies Texas transition from a regulated market to a competitive electric market.
During the four months it took to produce the study Michaels looked at characteristics of a competitive market and said he found all three basic characteristics in post-deregulation.
Since day one of the deregulation Michaels said there has been price competition allowing customers to switch suppliers. New plants give customers steady prices and companies present customers with new innovations in rates and services he said.
Customers also have more of a choice on where to get their electricity. Texas is probably the greatest success in retail markets in probably the world Michaels said.
Senate Bill 7 which passed in 1999 opened the electric retail market for deregulation in areas not served by an electric cooperative or municipality. This which is about 85 percent of the state.
The reason these ideas on bulk power purchasing by cities and reregulation of the market have been rejected is fairly simple. In most parts of the state there are lower competitive prices today than when prices were regulated. One could wisely conclude that this should & could continue if left in place.
The PUC and Association of Electric Companies of Texas provide information to support this claim through their offices or websites. You can follow these links for more information www.puc.state.tx.us and www.aect.net.
The Texas competitive market is working even if opponents of business and free markets think otherwise.
