As a follow up to the previous post (Retail electric choice states have higher prices than states with monopoly. Why?) here is a chart that separates Texas from the retail choice average.
We may want to separate Texas from the other “choice” states for a few reasons.
1. A significant number of customers in the state remain served by monopolies: all utilities outside of the ERCOT wholesale market remained traditional monopolies, and municipal utilities and co-ops within ERCOT were allowed to remain monopolies as well. (These utilities could choose to allow competition. So far just one co-op in ERCOT has enabled competition. The municipal utilities in Lubbock, Texas, joined ERCOT in 2021 and intends to allow competition beginning in late 2023.) So in a chart with blue = choice and red = monopoly, Texas is purple.
2. Texas implemented retail choice differently than most other states. Some retail electric policy advocates say Texas implement reforms better than most other choice states. Some reasons for the claim: Wholesale and retail markets are better integrated in Texas; the residual regulated “wires” businesses are entirely separate from any businesses owning electric generation or selling retail power in Texas; and retailers bill their customers in Texas, not the legacy regulated wires utility.
3. In addition, unlike almost every other state that seriously considered reforms, Texas power prices were near the national average when it began implementing the reforms.
And if we look at inflation-adjusted average prices in Texas relative to other retail choice states and to monopoly states, the prices look a bit different too.
In these posts I am not making claims about causal relationships, I am only observing differences in average prices. But these simple averages are a good place to start asking questions. Questions like: Why are prices in most retail choice states higher? Why did prices in Texas go up faster than most from 2001 to 2008, then fall faster than others from 2009 to 2022? How could Wall Street Journal reports look at EIA data and think that Texas consumers would have been better off sticking entirely with monopoly utilities?