Texas' deregulation sticker shock

[David Farber <dave () farber net>]

________________________________________
From: Robert J. Berger [rberger () ibd com]
Sent: Tuesday, July 22, 2008 1:20 AM
To: Dewayne Hendricks; David Farber
Subject: Texas' deregulation sticker shock

Texas' deregulation sticker shock
Andrew Leonard "How the World Works"
http://www.salon.com/tech/htww/2008/07/17/texas_electricity/index.html
Schadenfreude alert:

In 2002, Texas sweepingly deregulated its electricity market. Today, a
page one story in the Wall Street Journal 
(http://online.wsj.com/article/SB121625744742160575.html?mod=loomia&loomia_si=t0:a16:g2:r3:c0.111415
) by Rebecca Smith informs us that citizens of Texas are paying some
of the highest electricity rates in the United States.

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!

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Robert J. Berger - Internet Bandwidth Development, LLC.
Voice: 408-838-8896 eFax: +1-408-490-2868
http://www.ibd.com




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