Texas’ energy-only market has been the most competitive and efficient electricity market in the world. This isn’t surprising since competitive markets of all kinds supply reliable and affordable products.

However, increasing intervention in the Texas markets in the form of renewable energy subsidies and mandates has distorted price formation and the demand curve, leading to an increasingly dysfunctional market. Texans are paying higher prices for a less reliable supply of electricity.

Key Points

  • Because of the harm caused by the $2.5 billion Texans are forced to pay to the renewable industry each year, we are now being forced to pay another $4 billion to keep traditional (and renewable) generators afloat.
  • Increasing intervention in the Texas markets in the form of renewable energy subsidies and mandates has distorted price formation and the demand curve, leading to an increasingly dysfunctional market.
  • While much of the problem with renewable subsidies is caused by the federal government, Texas does have the ability to fight back by forcing renewable generators to pay for the costs they impose on the system.