Analysis: The murky and confusing Texas electricity market
Houston Chronicle by L.M. Sixel Nov. 1, 2019
A basic economic principle holds that a key to well-functioning and efficient free markets is transparency, a state of affairs that allows participants to have the same access to information to make decisions on what to buy and sell. It works in stock, oil, and currency markets, where prices and other essential information are available to everyone.
But in Texas, where electricity deregulation was touted as unleashing the power of free enterprise, power markets tend to be more like frosted glass than clear panes. The murkiness extends from retail plans with confusing pricing and terms to wholesale markets, where bids are kept secret, to transmission, where the biggest commercial and industrial power users can game the system to push costs onto small businesses and households.
Texans have paid for this lack of transparency. For nearly two decades, consumers living within the compeititive power markets of Texas — which cover about 85 percent of the state — have consistently paid higher prices for electricity than those buying electricity from regulated municipal utilities and cooperatives, according to the Texas Coalition for Affordable Power, a group of cities that buy power in the deregulated market.
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