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Musings on Economic Freedom from the Texas Public Policy Foundation’s
PUC Ready to Re-regulate Texas’ Electricity Market
The discussion at the most recent PUC open meeting made it clear that a majority of the commissioners are ready to re-regulate Texas’ world-class electricity market, replacing competition with a capacity market fueled by a de facto electricity tax, collected though consumers’ bills, projected to run from $3 to $5 billion a year. The statements in support of a mandatory reserve margin will lead to a regulated system that takes decisions out of the hands of Texas consumers—and puts them into the hands of the PUC.
Rather than addressing Texas’ reliability concerns through a free and functioning market, the Lone Star State is instead moving toward a system of corporate subsidies and centralized control. This is the beginning of the end of the world’s most competitive electricity market and one of the great examples of deregulation in the United States. It sends an unfortunate signal that Texas is ready to run its electricity market much like Washington, D.C., is running our health care system.
Here’s our entire lineup on the Texas electricity market.
Farmers' Settlement Highlights Years of Excessive Homeowners Insurance Regulation
The proposed $117.5 million settlement between the Texas Department of Insurance (TDI) and Farmers Insurance is a reminder of the problems caused by years of excessive regulation and litigation by TDI.
For instance, in Geeslin v. State Farm Lloyds, the courts declared TDI’s actions void and unenforceable, finding the statute unconstitutional and that TDI had denied State Farm due process. In TDI v. Allstate, TDI’s effort to make the company pay claims not included in its policies was found to be an unenforceable interference of the freedom to contract. Finally, in TDI v. State Farm the courts declared a rate supervision order from TDI to be arbitrary and capricious. … continue reading
There and Back Again: The High Transition Costs of Electricity Regulation
Just as Texas consumers are beginning to see some slight relief from paying off the $9.5 billion price tag for transitioning to today’s competitive electricity market, the PUC is deliberating whether to add another $3 to $5 billion in annual payments in order to move back toward regulation. ... continue reading
PUC should make the right call
Any championship football coach can tell you that successfully converting a fourth and long does not depend on making a quick decision; it depends on making the right decision. Considering that a bad call could add upwards of $ 4 billion dollars per year to Texans’ electricity bills, the Public Utility Commission of Texas (PUC) should heed that Sunday-night wisdom when deciding the fate of Texas’ competitive electricity market. … continue reading
A Capacity Market by Any Other Name Still Smells Like Big Government
The Public Utility Commission of Texas is now referring to a proposed capacity market as a reliability market. No doubt this name change is because capacity markets are getting a well-deserved bad name in Texas. For instance, in its first five years PJM’s capacity market cost consumers over $50 billion in capacity payments to generators. In Texas, the cost could reach $5 billion a year.
When the PUC commissioners vote to adopt a reliability market or a mandatory reserve margin, they will in fact be voting to adopt a capacity market. Calling a capacity market a reliability market won’t hide these facts. … continue reading
You Can't Make This Stuff Up
The city of Seattle is forcing a 103-year-old Spokane woman to sell her parking lot in Seattle to make way for, well, a parking lot. … continue reading
How to Reduce the Cost of Homeowners Insurance
A Texas state senator recently asked, “How might we offer something to consumers that at least gives them the opportunity, albeit for less coverage, to be able to pay less price” for homeowners insurance? That’s a good question.
There are two main ways to address this and reduce homeowners insurance prices in Texas. First, change the law to eliminate rate and content regulation. Second, we have to reduce the excessive regulatory structure at TDI. … continue reading
Texas PolicyCast: A discussion on Competition in the Energy Market
Listen to our latest Texas Policycast discussing electricity regulation
Bill
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Vice President of Research
Director, Center for Economic Freedom
Texas Public Policy Foundation
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