Legislative Alert – House Bill 16

Legislative Alert – House Bill 16


DON’T ABANDON OUR FREE MARKET PRINCIPLES


As conservative Texans, we embrace the concept of choice because it fosters competition which leads to lower prices. Texas’ competitive electricity market is the envy of the world because of the choice and freedom it offers.

It allows residential customers the freedom to choose the products that meet their needs – and even to take advantage of tools to manage their electricity consumption and expenses that normally are only available to larger commercial and industrial customers. Yet legislation is pending before the Texas Legislature to restrict this ability to choose – all because of the actions of a single company.

Rather than use a sledgehammer to eliminate competitive retail plans available to Texas residential customers – plans they have chosen to subscribe to and want to keep – the Texas Legislature should ensure there are reasonable guardrails that limit the potential for extreme electricity bills.

HB 16 is a natural reaction to the extremely high electricity bills residential customers subscribing to wholesale index electricity plans experienced as a result of Winter Weather Storm Uri due to prolonged high wholesale electricity prices. But eliminating these plans entirely ignores the fact that these plans often are the lowest cost option in the Texas electricity market – an option that normally saves customers as much as 40% compared to common fixed-price contracts. And even greater savings can be realized when customers pair these plans with new technology to better manage their energy consumption.

Rather than eliminate this option for Texans, if the Legislature wants to protect Texans from unusually high electricity bills that can result from unlimited wholesale index plans, they could require providers to limit the maximum rate customers will be exposed to. A reasonable limit should not significantly reduce the savings customers will continue to receive from these plans – but the lower the limit, the lower the savings customers will be able to realize from these plans as the cost to provide them will increase.