Texas’ deregulated electricity market has raised costs for consumers by $ 28 billion since 2004, in accordance with an analysis of the Wall Street Journal published Wednesday.
The analysis found that consumers of purchasing power from the deregulated electricity market have paid much more than residents of the state whose sources were traditional electricity services.
The report comes as a result of widespread power outages in Texas that left millions of residents without electricity for days amid freezing temperatures. This was followed by many households receiving high electricity bills, with expert warnings stating that consumers could cover the costs of network upgrades.
The decision to have a deregulated electricity market dates back to 1999, when legislation was first introduced to deregulate the market in Texas. Proponents of the bill said it would create more competition in the sector and lower prices for consumers.
However, according to the newspaper, homes in the deregulated market paid rates 13 percent higher than the national average from 2004 to 2019. Those using traditional utilities in Texas paid 8 percent less than the national average during this period of time.
The data used for the analysis came from the Federal Energy Information Administration.
While deregulation in Texas was designed to allow for greater competition, industry mergers have left Texans with two major retail electricity suppliers.
Texas isn’t the only state with a deregulated electricity market, but other states give residents a choice between retail electricity and electricity from a regulated public company.
When the bill was approved in Texas for a deregulated market, 60 percent of residents were forced to get electricity from a retail company, the newspaper reported.
Investigations into power companies and the reason for the huge disruptions during the winter storm are already underway as part of an effort to ensure Texas does not face a similar energy shortage in the future.