Summary

Prohibits any one company from owning more than 20% of the generating capacity in a market.

Background

Despite the breakup provisions in the original electricity deregulation bill, A few power companies still control the market for wholesale electricity. Companies are already prohibited to owning more than 20% of the capacity in the state, but TXU owns about 70 percent of the wholesale power market in its service areas./1/

Recently, a report by the Texas Coalition of Cities for Utility Issues demonstrating that electricity prices in Texas are among the highest in the country received national and local attention (see here and here). This report was consistent with the findings of other research about the impact of deregulation in Texas. Retail electricity prices in Texas have increased 73%-80% since the beginning of deregulation. Further breakup of the market is intended to reduce the ability of incumbent providers to charge monopoly rents.

Political Context

HB 2724 (79), with similar language, was left in committee in 2005. HB 483 is up for committee hearing on Tuesday 2/20/07.

Additional Links

/1/ Walker, Lynn Consumer groups concerned move might increase rates Times Record News January 8, 2007
Press Release "FRASER FILES LEGISLATION TO INCREASE COMPETITION IN RESIDENTIAL ENERGY MARKET" 2/7/07
Texas Observer Blog "The Power Companies That Be", "Re-Regulating the Electric Biz in Texas"