Greg Abbott on Sunday said the state’s Public Utility Commission has issued a moratorium on customer disconnections for non-payment and will temporarily restrict providers from issuing invoices.īut both agencies are nearly unaccountable and toothless compared to regulators in other regions, where many utilities have stronger consumer protections and submit an annual planning report to ensure adequate electricity supply. While they were expecting extra-low monthly rates, many may now face huge bills as a result of the upswing in wholesale electricity prices during the cold wave.
Texas power grid free#
But no state has gone as far as Texas, which has not only turned over the keys to the free market but has also isolated itself from the national grid, limiting the state’s ability to import power when its own generators are foundering.Ĭonsumers themselves got a direct shock last week when customers who had chosen variable-rate electricity contracts found themselves with power bills of $5,000 or more.
In some states, competing private companies offer varied packages like discounts for cheaper power at night. States like Maryland allow customers to pick from a menu of producers.
Yet many states have flirted with deregulation as a way of giving consumers more choices and encouraging new providers, especially alternative energy producers.Ĭalifornia, one of the early deregulators in the 1990s, scaled back its initial foray after market manipulation led to skyrocketing prices and rolling blackouts. Utility regulation is intended to compensate for the natural monopolies that occur when a single electrical provider serves an area it keeps prices down while protecting public safety and guaranteeing fair treatment to customers. “That opens up shortcuts that cause disasters.”īut what went wrong was far broader: Deregulation meant that critical rules of the road for power were set not by law, but rather by a dizzying array of energy competitors. “Deregulation was something akin to abolishing the speed limit on an interstate highway,” said Ed Hirs, an energy fellow at the University of Houston. The possibility of more frequent cold-weather events was never built into infrastructure plans in a state where climate change remains an exotic, disputed concept. Wind turbines are not equipped with the de-icing equipment routinely installed in the colder climes of the Dakotas and power lines have little insulation. With so many cost-conscious utilities competing for budget-shopping consumers, there was little financial incentive to invest in weather protection and maintenance. But the newly deregulated system came with few safeguards and even fewer enforced rules. Bush’s prediction of lower-cost power generally came true, and the dream of a free-market electrical grid worked reasonably well most of the time, in large part because Texas had so much cheap natural gas as well as abundant wind to power renewable energy.
Bush, then the governor, said as he signed the top-to-bottom deregulation legislation. “Competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices about the power they use,” George W.
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