SB 661, the PUC Sunset bill, is on Senate Intent for Thursday, April 14th, and may be up for debate. This bill includes many of the recommendations of the Sunset Commission from their review of the Public Utility Commission. While most aspects of the bill are good-please see our Sunset Report on the PUC, there is one provision in particular that represents a significant reversal in the direction of Texas regulatory policy toward our electricity market.

SB 661 gives the Texas Public Utility Commission emergency cease and desist authority. This provision represents a significant expansion of the PUC’s ability to regulate the electricity market and is a reversal of almost two decades of Texas electricity policy. Texas’ movement toward deregulation has given us the most competitive electricity market in the U.S. and brought tremendous economic benefits to the state through billions of dollars of investment and lower electricity prices.

If we are going to undertake a major shift in policy and put these benefits at risk, we should do so only if there is evidence that there is a significant problem in the electricity market. However, this is not the case. Whether the issue is prices, competition, or management of the electric grid, there is no evidence of any significant problems in the Texas wholesale or retail electricity markets. In fact, prices, competition, and transparency in the market are better overall today than at any time since the we started the move toward competition-and still improving.

There is simply no need to give the PUC emergency cease and desist authority. It already has cease and desist authority, and only needs to muster enough evidence to convince a judge to grant a temporary injunction in a case where there is a problem. Allowing the PUC to act first and prove its case later is not the type of regulatory policy that has made Texas the leading creator of jobs in the U.S. over the last ten years.

Since Texas began reducing government regulation of the Texas electricity market, there have been repeated attempts to reverse course and re-impose regulatory controls on the market. In fact, this has been a trend across the United States. Texas is one of the few states where these attempts been successfully rebuffed. Reversing course toward heavier regulation will cause significant harm to Texas consumers and the Texas economy by disrupting the market and creating regulatory uncertainty, which will ultimately increase the cost and the price of electricity in Texas.

For more on this issue, please see our recent publication, Solutions in Search of a Problem.

-Bill Peacock