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underpants's Journal
Posted by underpants in Latest Breaking News
Thu Jul 17th 2008, 08:15 AM
Source: Wall Street Journal

Texas had some of the cheapest power rates in the country when it zapped most of the state's electric regulations six years ago, convinced that rollicking competition would drive prices even lower.

This summer, electricity there is some of the nation's priciest.

Power costs are rising in the rest of the U.S., but everything is bigger in Texas: On a hot day in May, wholesale prices rose briefly to more than $4 a kilowatt hour -- about 40 times the national average.

Prices in Texas have risen since the industry was freed from regulation, but these recent increases have been quite a shock for America's most audacious experiment in deregulating electric power. Five retail companies that sell electricity to homeowners and small-businesspeople have failed. That has left customers facing unexpectedly high bills when they are quietly and seamlessly switched to other, more-expensive retailers.

Still, there is little momentum for big changes. Many Texas officials believe that their system -- lots of elbow room and few binding rules -- will work out best for consumers in the long run. "The system is working the way it is supposed to work," says state Rep. Phil King, the Republican from Weatherford who is chairman of the House Regulated Industries Committee.



Read more: http://online.wsj.com/article/SB1216257447...



Long article but a good read...oh and there is this too


Not long ago, Texas thought it had the answer. When then-Gov. George W. Bush signed the state's deregulation bill in 1999, he assured that "competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices." The law, which took effect in 2002, left few restrictions on what power generators could charge and what consumers could pay.

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