Dereg Sends Texas electricity rates soaring

Wednesday, July 23rd, 2008
by TXProgress

The Wall Street Journal reports (registration required) that deregulation of electric utilities is causing Texans to suffer under some of the highest electric rates in the nation.

Texans have seen their bills double this summer. There is no relief in sight. Coupled with skyrocketing gas and food prices, many are struggling financially to cope. It is a financial squeeze of almost unprecedented proportions.

From the Journal’s Rebecca Smith:

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.

What is the reaction of the current legislative leadership. Here’s what the chairman of the House Regulated Industries Committee, Rep. Phil King, said:

Many Texas officials believe that their system — lots of elbow room and few binding rules — will work out best for consumers in the long run. “The system is working the way it is supposed to work,” says state Rep. Phil King, the Republican from Weatherford who is chairman of the House Regulated Industries Committee.

Oh, really?