Texas' deregulated energy market has created an environment that in virtually all cases produced electricity rates that are lower than states that have not implemented energy deregulation laws, and new research suggests more states could benefit from such laws.
According to Fierce Energy, new figures from the Energy Information Administration show that states that have restructured their energy markets are faring much better, and that residential, commercial and industrial customers that purchase their electricity through a capacity market typically pay higher rates.
However, Texas is now eyeing introducing a capacity market due to the narrow reserve margins that the state's grid operator has warned about for months. Under a capacity market, regulators would set how much capacity to purchase for the future to ensure a stable grid. Prices would then be set by a formula that would be based on a competitive auction, however it would be influenced by the regulators.
According to Reuters, the record heat in Texas in recent years has led the the Electric Reliability Council of Texas (ERCOT) to lower the state's electricity reserve margin to fall below 10 percent by 2014.