When Hyperbole Becomes Delusion

Any casual observer of politics knows that hyperbole is a frequent, if unwelcome, occurrence in public policy advocacy.  Sometimes, however, an exaggeration is so wild that it drifts into delusion.  Such is the case with a collection of electric deregulation’s biggest boosters called the Texas Competitive Power Advocates (TCPA).

At issue is Texas legislation that proposes to build a fleet of electric generation facilities as an insurance policy against the obvious reliability problems in the Texas electricity market.  Whatever one thinks of the legislative proposal, the TCPA response to it is instructive.  The group commented that, “Texas’ competitive electric market has been the envy of electricity markets around the world, but these bills would scuttle that prized market.”

Two issues in particular stand out in the TCPA statement. 

First, calling Texas a “competitive” market is a misnomer.  Rather, it is dominated by just a few unrestrained energy oligopolies that deliver power at prices above what a competitive market would permit.  If regulation is a second-best option to competition, then Texas has the worst of all worlds.  It is competition in name only, with no regulatory backstop to protect consumers who are subject to a non-competitive market.

Second, TCPA proves itself delusional when it claims the Texas market structure is the envy of the world.  Call us skeptical that there are many citizens around the globe longing to adopt this so-called “prize” that delivers unreliable power at volatile rates.  We now have several years’ worth catastrophes and near-misses in Texas, and it isn’t confined to any one season.  Nearly any weather (hot, cold, or mild) now seems to trigger emergency operations for a grid that is chronically on the brink of failure.

It is understandable the oligopolies in the TCPA would seek to protect their fiefdom.  What company willing forfeits a line of business that is subject neither to effective competition nor regulatory oversight?  Nonetheless, they might garner more than just eye rolls if they would at least finally acknowledge what the rest of the world accepts at face value: Texas-style electricity deregulation is deeply flawed, and it isn’t something other jurisdictions will be adopting any time soon.