Texas moves to promote power plant investments

Texas wholesale electricity prices could rise under a new decision by the state's Public Utility Commission, according to The Statesman.

The move would not directly impact the electricity rates most residents are paying, but rather would raise the prices electricity providers pay during peak hours. The decision was made to increase the minimum price allowed for electricity generated at peak consumption hours because of complaints that power plants that run only during these times often prove unprofitable.

The goal of the price increase is to provide a greater incentive for companies to invest in new generation capacity, as there are growing concerns that Texas could see power shortages as soon as 2014. Though the decision might raise costs for some consumers, the hope is that electricity services will prove cheaper and more reliable in the long-term.

Some members of the commission opposed the move on the basis of costs, preference for other tactics to increase generating capacity or fear that the price minimums could undermine the state's electricity deregulation system.

"These proposals would artificially inflate some wholesale energy costs in a very dramatic fashion," Randy Moravec, executive director of the Texas Coalition for Affordable Power, told the Statesman. "The creation of such artificial price supports violates the principles of the competitive market and may ultimately harm consumers."

Through July of this year, the U.S. Energy Information Administration reports that Texas paid 11.3 cents per kilowatt-hour for residential electricity, slightly below the national average.