Electric deregulation is boon to Texas economy, study concludes

 

 

A new study by the Waco economic research firm The Perryman Group concludes that the Texas economy has benefited significantly from the deregulation of the retail electricity market that occurred four years ago.

Retail electric competition has provided an annual stimulus to the Texas economy of some $9.73 billion in total expenditures, $4.64 billion in gross product and almost 47,800 permanent jobs, the report estimates.

This is more than 10 times that of the new Texas Instruments wafer fabrication facility in Richardson, and more than five times the impact of the first phase of the Toyota manufacturing plant in San Antonio set to open later this year.

"Numerous innovations have been introduced and prices are lower than they would have been in a regulated environment," said Ray Perryman, economist and president of The Perryman Group. "Market forces are having the desired effects of providing consumers with more control and more choices at prices lower than they would have been under regulation."

Cost savings from four years of competition has led to advances in many economic areas, the study says. Since deregulation was initiated, more than two million electricity customers have switched service providers. Also over that period, more than $11 billion has been invested in new plants, resulting in more than 340,000 person-years of employment -- an average of almost 50,000 jobs a year.

Meanwhile, renewable-energy generating capacity has increased with wind-powered generating plants adding about 1,900 megawatts of electric capacity since 1999. This has helped lead to a dramatic decrease in the total metric tons of emissions from Texas electric utility facilities.

TXU Wholesale, a unit of Dallas-based TXU Corp. (NYSE: TXU), this week announced it would increase its contracts for wind power under a deal with Airtricity, a renewable energy company based in Dublin, Ireland.

"An adequate and affordable supply of electric power is essential to current and future prosperity," Perryman said. "Since the introduction of competition in the retail segment of the market for electric power, Texans have enjoyed substantial savings compared to likely rates in a regulated environment."