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U n p l u g g e d : H i g h Pr i c e s U n d e r T e x a s E l e c t r i c D e r e g u l a t i o n
November 2008
For more Information
Cities Aggregation Power Project, Inc
R.A. Dyer
512 658-0017
Unplugged
High Prices Under Texas Electric Deregulation
A new study from the Cities Aggregation Power Project, Inc.
Texans, before deregulation, enjoyed
some of the most affordable electricity in the
nation. Yes, Texas summers could be scorching
hot. Yes, bills could be high. But rates — that
is, what Texans paid per kilowatt-hour to cool
their homes — remained well below the
national average.
No longer. Since lawmakers
deregulated the state’s retail electricity market
in 1999, Texas has suffered some of the
steepest residential price increases in the
nation. Even compared with prices in other
deregulated states, the Texas model fairs poorly. Here’s a fact: since 1999, no state with retail
competition has seen residential prices increase by a larger percentage than has Texas.
Also, contrary to a commonly-held misconception, the high prices paid in Texas relative to
prices paid in other states cannot be ascribed solely to the reliance in Texas on natural gas-fired
power plants. About half of the state’s generation comes from such plants. But a review of states
with a similar dependence on natural gas shows that ratepayers here continue getting a raw deal.
The following report, commissioned by the Cities Aggregation Power Project, is based on
several years of data compiled by the United States Energy Information Administration, an agency
charged with collecting and analyzing information related to the electricity, petroleum and natural
gas industries. The report compares residential rates in Texas with residential rates in other states,
compares prices in regulated against prices in deregulated states, and looks at the impact of natural
gas on prices.
About CAPP
The Cities Aggregation Power Project is a non-profit organization