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ERCOT Study: Deregulation Didn’t Work

By Jack Fink, CBS 11 News
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(credit: Getty Images/Justin Sullivan)

(credit: Getty Images/Justin Sullivan)

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ARLINGTON (CBSDFW.COM) – Delia Villareal of Arlington cooks three meals a day for herself and her husband, so she’s not happy to hear about a new study finding Texas residents have paid nearly $11.5 billion dollars more than they should have for electricity since deregulation in 2002.

That’s about 42 percent higher than the national average.  “I find that being very ridiculous,” says Villareal.  This despite the promises deregulation would trigger competition and lower prices.  “Us as the elderly live on a budget, we’re on a fixed income. Of course, it’s affecting us.”

The study is called The Story of ERCOT, the Electric Reliability Council of Texas, which runs the state’s power grid.  The study blames the high electric rates residents and businesses pay on Ercot’s bias toward the industry, and what it calls ERCOT’s alarming increases in spending and borrowing.

The study says in 2006, one company illegally charged $57 million, yet only paid a $15 million fine.

Arlington City Attorney Jay Doegey chairs two non-profit coalitions that commissioned the study.  He says,  “Everything is fine and if they just leave things alone, then everything’s wonderful. For them, everything’s wonderful. But it’s not wonderful for consumers.”

ERCOT declined an interview, but says the issues have been brought up before.  In a statement, it says “…These are expected to be acted upon by the Texas Legislature during their current session, and ERCOT stands ready to institute any and all changes the Legislature adopts….”

The study’s author says the state legislature needs to make drastic changes to make Ercot more accountable to the public. Lawmakers may do just that. On Tuesday, a state Senate hearing will focus on the recent rolling blackouts.

As for Delia Villareal, she’s hoping the legislature will listen to people like her.  “They need to get their act together. We’ve been promised lots of things. Where’s all the promises?”

On Tuesday, ERCOT’s president, the chairman of the Public Utilities Commission, and energy company executives will be among those testifying before lawmakers about the recent rolling blackouts.

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