An example of something in Texas that makes outsiders scratch their heads (Houston: bankruptcy, subsidized)

[JasonAndJulie]

Right, there isn't a state income tax, but there is a really high tax for everything else! Property tax is through the roof. Even though we don't have a sales tax on food, I know many midwestern states (haven't compared to others on the coasts) pay much less at the grocery store than we do. I could go on and on.

I get what you're saying, but there is a flip side to everything. Whether or not it should have been deregulated I don't know enough to make an informed opinion on, but I am SO tired of those people who come here from other states thinking we are the land of milk and honey only to find out it isn't near as cheap as they thought it would be, and only then do they realize we are not what they originally thought.

[jek74]

Deregulation of the Texas electricity market - Wikipedia, the free encyclopedia

Here is a great overview. It shows that prices have indeed dropped since de-regulation albeit marginally and it's been good for the environment.

[jek74]

Originally Posted by JasonAndJulie

Chicago heat bills might be $400 in the winter, but many people pay $400+ here in the summer, and $300+ 9 or more months out of the year. It varies depending on the direction your house faces, how energy efficient it is, and a million other factors. If you think we don't pay high utility bills in Texas, you are mistaken.

Well, let's be clear here. People pay high gas bills in Chicago 6 months out of the year and high electric bills 3 months out of the year when it's 90 plus in the summer. Perhaps you didn't see all the violence we had last summer from the constant heat waves. This means that 9 months out of the year we pay very high rates. Same in Houston where you pay for AC 9 months out of the year and the other 3 months, like now, you have perfect weather. Trust me, the math works out. And yes, TX has high utility bills because apparently TX has the highest demand for electricity in the entire county. Supply and demand.

[jek74]

Originally Posted by JasonAndJulie

Right, there isn't a state income tax, but there is a really high tax for everything else! Property tax is through the roof. Even though we don't have a sales tax on food, I know many midwestern states (haven't compared to others on the coasts) pay much less at the grocery store than we do. I could go on and on.

I get what you're saying, but there is a flip side to everything. Whether or not it should have been deregulated I don't know enough to make an informed opinion on, but I am SO tired of those people who come here from other states thinking we are the land of milk and honey only to find out it isn't near as cheap as they thought it would be, and only then do they realize we are not what they originally thought.

I would gladly pay a 100% markup on utilities to not have to pay the 5% to 10% state income tax of IL, NY and CA and the $1 gasoline tax in Chicago as well as real estate that is two to three times as expensive. I honestly don't understand your anger. People move to TX so they can work. In the 1980's the flocked to CA for jobs. In the 1990's it was Silicon Valley and in the 2000's it was Washington DC. Now it's TX. Nobody is flocking to TX because they think everything is so cheap. Hell, if that were true there would be a mass migration to Iowa and there is not. They are coming here for the jobs. Same reason why they are moving to Williston, ND where it's -75 in the winter. Not because it's cheap, but because guys can make 150k a year working in the oil fields.

And again, I've discussed the property tax here ad nausem. The "notional" value of the tax is one of the cheapest in the country. The "rate" is one of the highest. The fact is that 250k home in the woodlands would be worth 750k in Winnetka on the north shore of Chicago. And that 5k tax in the Woodlands would be 12k in IL even though the rate in IL might be lower.

[Zhang Fei]

Originally Posted by DiverTodd62

It didn't occur to me because it isn't true. Electric utilities were not government owned. They were privately owned or coops. They were highly regulated and allowed about 8% profit and had to show the books to support the rates they requested. There was never any transfer of funds from city/state to utility companies.

And if you think they were subsidized by tax dollars, then deregulation should have resulted in lower local tax rates. Not.

I'm gonna have to agree with you here. For whatever reason, deregulation has merely reshuffled the deck by getting a bunch of power resellers to set up shop instead of enticing new power providers to enter the market. It's possible there are significant barriers to new power providers entering the market that may have to be taken down via new regulations or legislation.

[JasonAndJulie]

Live here for more than a week and we'll revisit the conversation. I promise.

[jek74]

Originally Posted by JasonAndJulie

Live here for more than a week and we'll revisit the conversation. I promise.

It will be a week tomorrow. And technically, I've lived here for more then 12 months if you add up all my time here. My family has lived down here since 2007. So drop me a line when you are ready to revisit this conversation.

[oceangaia]

Originally Posted by jek74

Deregulation of the Texas electricity market - Wikipedia, the free encyclopedia

Here is a great overview. It shows that prices have indeed dropped since de-regulation albeit marginally and it's been good for the environment.

If prices have dropped, it's been across the nation as natural gas prices are in the dumps not because of any "deregulation". The chart I posted made it clear as a lighthouse - the regulated areas of Texas have fared better than than the deregulated areas.

As for environment, there is a move to "smart grid" technology and alternative energy and natural gas plants everywhere, not just Texas. Your own link says "In environmental impact, results are mixed." Your link also states "Another positive environmental impact is the effect of higher energy prices on consumer choices... residents are reducing their electrical usage." Haha! Which is it? Is deregulation good for the economy by lowering prices or good for the environment by raising prices? You can't have it both ways.

Another failure of deregulation was the promise it would increase generating capacity to ensure reliable power supply. Seems to me when never had rolling blackouts and dire warnings before deregulation. The problem that we've seen is that when you leave it up to supply and demand, generators have an incentive to restrict supply, by delaying increases in generating capacity and taking plants offline. We would have been hurt much worse though if the generation side of the equation had been fully deregulated. But now that the PUC has doubled what generators can charge with another doubling likely next year, expect to see much higher bills not to mention retailers will be very reluctant to offer reasonable fixed rate plans.

[oceangaia]

As further illustration of how deregulation encourages market manipulation more than competition, and since you like Wikipedia, review California electricity crisis

"The California electricity crisis, also known as the Western U.S. Energy Crisis of 2000 and 2001, was a situation in which California had a shortage of electricity caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums."

"California had an installed generating capacity of 45GW. At the time of the blackouts, demand was 28GW. A demand supply gap was created by energy companies, mainly Enron, to create an artificial shortage. Energy traders took power plants offline for maintenance in days of peak demand to increase the price."

"The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets."

[jek74]

Originally Posted by DiverTodd62

If prices have dropped, it's been across the nation as natural gas prices are in the dumps not because of any "deregulation". The chart I posted made it clear as a lighthouse - the regulated areas of Texas have fared better than than the deregulated areas.

As for environment, there is a move to "smart grid" technology and alternative energy and natural gas plants everywhere, not just Texas. Your own link says "In environmental impact, results are mixed." Your link also states "Another positive environmental impact is the effect of higher energy prices on consumer choices... residents are reducing their electrical usage." Haha! Which is it? Is deregulation good for the economy by lowering prices or good for the environment by raising prices? You can't have it both ways.

Another failure of deregulation was the promise it would increase generating capacity to ensure reliable power supply. Seems to me when never had rolling blackouts and dire warnings before deregulation. The problem that we've seen is that when you leave it up to supply and demand, generators have an incentive to restrict supply, by delaying increases in generating capacity and taking plants offline. We would have been hurt much worse though if the generation side of the equation had been fully deregulated. But now that the PUC has doubled what generators can charge with another doubling likely next year, expect to see much higher bills not to mention retailers will be very reluctant to offer reasonable fixed rate plans.

I'll tell you what. You believe whatever it is you want to believe. You obviously have a belief system that will not allow you to believe in any other possibilities then de-regulation is bad. As someone who has been involved in the financial markets for over 15 years and has made a living in them, I know the "reality" of it vs the "theory". I'm not going to be able to change your mind and quite frankly, I have no desire to. The fact of the matter is, to have a perfectly fixed market you need to fix all the input costs, not just the output. This means you have to fix the price of coal or natural gas which is used to generate electricity. If those costs skyrocket and you put a ceiling on the end product, you put all the utilities out of business. It's the same reason restaurants raise food prices when the cost of meat or grains go up.

I don't expect you to understand this because like so many of you on this forum, you live in this all so simple world where everything is black and white. The real world has thousands of variables and all of them are dark grey. If everything was as simple as so many of you make things out to be, we would all be billionaires and not complaining about how hot it is in TX and how bad the traffic is but drinking mai ties on the beach somewhere. But you're not are you? No, you are slaving away at some job to pay your mortgage because you know dang well that things are NOT that easy. But if it helps you to live in some fantasy world then by all means, I see no harm in letting you believe that.