Deregulation Jolts Texas Electric Bills
[Quote:]
Texas had some of the cheapest power rates in the country when it zapped most of the state’s electric regulations six years ago, convinced that rollicking competition would drive prices even lower.
This summer, electricity there is some of the nation’s priciest.
Power costs are rising in the rest of the U.S., but everything is bigger in Texas: On a hot day in May, wholesale prices rose briefly to more than $4 a kilowatt hour — about 40 times the national average.
[..]
Not long ago, Texas thought it had the answer. When then-Gov. George W. Bush signed the state’s deregulation bill in 1999, he assured that “competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices.” The law, which took effect in 2002, left few restrictions on what power generators could charge and what consumers could pay.
And politicians never learn - they’re making the same deregulation claims over here, and prices are also going up faster than ever..
July 18th, 2008 at 21:13
The article does a lousy job of teasing apart the relative contribution of different factors to the high prices in Texas. Network structure and congestion are cited as an issue, but there’s also the mention that Texas uses more natural gas than other states to generate power. Natural gas prices might explain most of the price increase. You certainly can’t say “it’s all because of deregulation”.
July 20th, 2008 at 9:29
Well, here they started to privatize the electricity. Same promises “the deregulated competition will mean lower prices” I think it’s up by 34% by now, and climbing.
So probably the deregulation has nothing to do with it. Neither does giving it out to private companies.
July 20th, 2008 at 9:35
If it says nothing about the deregulation, what does it tell you about the promises?
July 21st, 2008 at 12:03
Why didst thou promise such a beauteous day,
And make me travel forth without my cloak,
To let base clouds o’ertake me in my way,
Hiding thy bravery in their rotten smoke?
‘Tis not enough that through the cloud thou break,
To dry the rain on my storm-beaten face,
For no man well of such a salve can speak
That heals the wound and cures not the disgrace:
Nor can thy shame give physic to my grief;
Though thou repent, yet I have still the loss:
The offender’s sorrow lends but weak relief
To him that bears the strong offence’s cross.
Ah! but those tears are pearl which thy love sheds,
And they are rich and ransom all ill deeds.
July 22nd, 2008 at 20:17
I think it will take time for most of the companies to lower to a reasonable rate. So many new companies want to undercut the big dogs and then they lock in with the customers and realize they can’t actually pay for their power because they don’t even generate their own. Being a middle man energy provider can’t be fun.
I’m just glad I get paid just for referring people to the largest CREP (competitive retail electric provider) in TX. The rates are lower than the monopolies like Reliant and TXU and even able to provide a GREEN 100% renewable option that is cheaper than their standard generation.
Wait for the gas prices to go down and if prices are still high then maybe deregulation does have something to do with driving prices up. Either way we are in a period with high rates and I think people just need to realize you don’t have to pay month to month rates if you don’t want to. You don’t even have to stick with the monopoly companies either as electricity is the same everywhere.
I just helped a person who was on a .22/kw rate using 3000+ kw with Reliant. My first question to him was why he didn’t switch sooner. Does he like spending 25% more a month for the same electricity? NO. It’s more about customer education and hopefully everything will level itself out.
July 23rd, 2008 at 15:01
“I think it will take time for most of the companies to lower to a reasonable rate”
Yes, for example when their legal duty will not be to produce the maximum profit in any way. They will price it as high as people are willing to pay.
Just a short history question: Do you remember Enron?
There you go.