Texas’s deregulated electricity market has increased consumer costs by $ 28 billion since 2004, according an analysis of the Wall Street Journal published on Wednesday.
The analysis found that consumers who buy power from the unregulated electricity market paid significantly more than residents of the state whose sources were traditional electricity utilities.
The report comes in the wake of widespread power cuts in Texas, which left millions of residents without power for days amid freezing temperatures. This was followed by many families receiving very high electricity bills, with expert warnings that consumers are likely to be hit by covering the costs of upgrading the network.
The decision to deregulate the electricity market dates back to 1999, when legislation was first introduced to deregulate the market in Texas. Proponents of the project said it would create more competition in the industry and lower prices for consumers.
However, households in the deregulated market paid fees 13% higher than the national average from 2004 to 2019, according to the Journal. Those who used traditional utilities in Texas paid 8% less than the national average during that period.
The data used for the analysis came from the Federal Energy Information Administration.
While deregulation in Texas was designed to allow for more competition, mergers in the sector left Texans with two major retail electricity suppliers.
Texas is not the only state with some unregulated electricity market, but other states offer residents the choice between retail electricity and electricity from a regulated state utility.
When the Texas bill was approved for a deregulated market, 60% of residents were forced to obtain electricity from a retail company, the Journal reported.
Investigations into electrical utilities and the reason for major disruptions during the winter storm are now underway as part of an effort to ensure that Texas does not face a similar power shortage in the future.