While advocates of customer choice tout the potential for energy savings, deregulated markets simply haven’t delivered on those promises.
Studies by the American Public Power Association show residential electric rates are 36% higher in deregulated states, on average, than in traditionally regulated markets. Our state’s electric rates are lower than those in most deregulated markets, and the cost of transitioning to such a system would drive them significantly higher.
Having sole responsibility for a single service territory allows our state utilities to plan efficiently for future energy needs, reducing long-term costs for customers. In deregulated states, complex systems must be developed to incentivize the development of necessary energy resources, driving costs higher and creating resource adequacy risks.
The failure to develop enough energy resources can cost customers dearly. After winter storm Uri hit Texas in February 2021, some residents reported that their electric bills jumped from 12 cents per kilowatt-hour (kWh) to $9 per kWh – a 7,400% increase. Some customers who suffered without power during the storm were billed up to $17,000 for one month’s energy usage. In addition to the personal hardships and power outages, it’s reported that Uri caused $130 billion in economic damages for the state while contributing to at least 210 deaths.