The state of Texas’ world class electricity market demonstrates the benefits of competition. The average offer price for new service is about 11.6 cents per kWh, while the average of the 20 lowest offers is around 9.3 cents per kWh. In addition, projections for reserves are as good as they’ve ever been. The reserve margin is about 11% and has proved adequate during 2018’s hot summer despite the closure of three coal plants.
Today’s affordable prices and adequate levels of reserves are the result of many factors, such as the low price of natural gas. But there are also many instances where prices are artificially lowered through government interference. For example, renewable energy subsidies have artificially lowered the price of electricity thanks to supporting wind power. However, consumers still pay for the electricity generated by wind, meager compared to the demand for power, through higher taxes.