September 28, 2019
In 1999, with the enactment of Senate Bill 7, Texas began its historic march toward the deregulation of retail electricity. Although not immediate in effect, the state’s groundbreaking legislation eventually ushered in some of the most significant changes ever for its power consumers.
No longer would giant, vertical-integrated utilities maintain their monopoly grip on all home electricity service. No longer would Austin political appointees determine directly the price of air conditioning and lighting in all parts of Texas.
In commemoration of that anniversary, the Texas Coalition for Affordable Power has released an updated version of its signature report, Electric Deregulation in Texas: A Market Chronicle. The book, organized chronologically in a year-by-year fashion, is available through free digital download. Go to the TCAPtx.com for more information.
“This book is a great resource for anyone interested in the history of the state’s deregulated electricity market,” said TCAP executive director Jay Doegey. “It follows the ups and downs of the market, and provides great explanatory material. You can read about the price increases shortly after the transition to deregulation, you’ll see how prices improved in later years and the book includes technical material relating to the grid operator, resource adequacy and other important issues we face today.”
The 140-page historical report describes key deregulation-related events, beginning with those years prior to the adoption of the 1999 law and through 2019. It includes more than 20 sequential chapters, each focusing on individual years. The report updates an earlier version first released in 2009 by TCAP for the law’s 10-year anniversary.
Among the findings in the 2019 edition:
- Texans in deregulated areas historically have paid more for residential electricity than have paid Texans outside deregulation. In recent years, however, residential prices in deregulated areas have dropped while they have slightly increased in areas outside deregulation. As a consequence, a long-standing gap between residential prices paid in deregulated and non-deregulated areas has nearly vanished.
- Customer complaints logged with Texas regulators increased dramatically after the implementation of the deregulation law, but like electricity prices, have fallen in recent years.
- Transmission and distribution rates have increased at a pace greater than inflation. Although these rates remain regulated, they contribute to electricity costs in deregulated areas.
- Deregulation-related charges known as stranded costs added nearly $7 billion to consumer bills.
“This state’s deregulated electricity market has matured, and that’s the good news,” said Jay Doegey, TCAP’s executive director. “But there’s been ups and downs along the way and you can read about them in this report. We still have a long way to go.”