Electricity, but at what cost for Texas?

Posted Tuesday, Oct. 29, 2013  comments  Print Reprints

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What the Public Utility Commission of Texas started on Friday could become the most fundamental change to the state’s electricity market since the restructuring set up by the Legislature in 1999.

The “deregulated” market created by lawmakers 14 years ago will return to regulation, at least to a small but significant degree, if commission members follow through on their decision in the coming months.

Getting used to the deregulated power market hasn’t come easy for Texans, and the move still has its detractors. But the ability to go online, shop for an electricity provider and pick one based on price or reputation or record of dealing with complaints or the coolest logo has taken hold in millions of homes.

Some areas are still served by municipal power companies or other suppliers and are not part of the deregulated market.

What the commission has indicated it will do is require customers to pay power generating companies more to make extra electricity available just in case it’s needed.

That’s called a “reserve margin.” Advocates say it’s necessary because when temperatures spike during the Texas summer and homes and businesses put their air conditioners into high gear, you never know exactly how much electricity you’ll need to meet the peak demand.

If there’s not enough, power grid operators have few options. Some large industrial users have agreed to be taken off-line during a power shortage. There have been some suggestions for altering other consumer behavior.

But at the end of that short list come “rolling blackouts,” when power shuts off neighborhood by neighborhood or region by region. Lack of reliability is the scariest of monsters when it’s left to roam the electricity market.

PUC Commissioner Ken Anderson has fought the good fight on behalf of consumers in opposing the move to a required reserve margin. He said free market changes recently made by the commission, including allowing providers to charge significantly more for peak-period electricity, have not been given enough time to spur increased supply.

Anderson also says settling on a specific required reserve margin and its associated compensation is a slippery slope away from a deregulated market.

He’s right, but he’s outnumbered. He can still help make sure the PUC moves cautiously.

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