Texas' deregulation sticker shock

Texans pay more for their electricity than the rest of the U.S. And that's exactly how it should be, say Republicans.


Andrew Leonard
July 17, 2008 6:41PM (UTC)

Schadenfreude alert:

In 2002, Texas sweepingly deregulated its electricity market. Today, a page one story in the Wall Street Journal by Rebecca Smith informs us that citizens of Texas are paying some of the highest electricity rates in the United States.

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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.

But that's OK. Because:

"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.

Such honesty from an elected official is to be applauded. Of course, what King really means is that high prices are supposed to provide incentives for utilities to build new power plants and improve the transmission grid, but the WSJ's Smith doesn't tell us anything about whether new supply is coming online.

A couple of weeks ago, the Nation featured an exuberant look at the prospects of Democrats wresting Texas from Republican hands. My initial opinion was that the article was more an exercise in wishful thinking than sober political analysis. But who knows? Republicans own the state, lock, stock and barrel, and Republicans have delivered to their constituents some of the highest electricity prices in the country. Well done!


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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