Texas Gov. Greg Abbott announced a plan earlier this week to disrupt what he labeled as "utility monopolies." The governor said in a statement that doing so "will lower electricity costs by expanding consumer choice."
But one expert whose been watching the energy market for years says Austin Energy already has some of the lowest prices in the state's electric grid.
Cyrus Reed is the legislative and conservation director at the Texas chapter of the Sierra Club, a nonprofit organization focused on environmental issues. He says, in the deregulated model of competitive markets, like in Corpus Christi, Houston or Dallas, prices are not typically lower than city-owned utilities, like Austin Energy.
"Depending on the utility, the prices might be lower in the competitive market," he said. "But in the case of Austin Energy, in part because of the investments made on energy savings programs and onsite solar, the average bills in Austin Energy are actually the lowest in ERCOT," he said, referring to the Electric Reliability Council of Texas, which manages the state's grid.
Abbott said his latest push was part of his effort to address the growing strain of energy prices on Texas households. "That's why I'm proposing legislation to end the monopoly control that cities like Austin and San Antonio have over electricity services and give Texans the freedom to choose the provider that works best for them," he said. "By expanding competition, residents in Austin and San Antonio could save more than 10% on their electricity bills, with small businesses seeing even greater savings."
Energy use has been front and center ahead of the upcoming election, especially when it comes to data centers and the reliability of the state's electric grid. Reed says that assuming the governor's proposal is for all energy consumers — retail, industrial, commercial and residential — to opt out of municipal utilities, the grid's reliability could be affected as an unintended consequence.
"On the one hand you say, 'Oh, choice is good. Maybe someone can shop for lower prices.' But what you're basically doing is impacting those utilities and their plans to invest in a more reliable system," he said.
Reed says a lot of the power generation decisions Austin Energy and other municipal utilities are making depend on having a customer base that can then support that investment.
"That investment actually serves the whole grid. It's not just tied to those customers, it's serving the whole grid. So this could really put that reliability at risk," he said.
This isn't the first time Reed has heard this idea floated in the halls of the Texas Legislature. But he says this is the first time hearing it come from the governor — and it took him by surprise.
"We hadn't seen this broad of a proposal, and especially not coming from the governor," he said. "Again it sounds good, lowering prices by giving people options. The issue is you are going to impact all of those cities that use the non-for-profit revenues to go back into their system and into other programs. You're gonna undermine that and therefore they will probably have to raise property taxes to cover those costs."
Reed spoke with host Jerry Quijano on KUT's daily news show, Austin Signal. You can listen to the whole conversation in the player above.
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