Washington (September 12) – The electricity industry is in the midst of a historical transition, highlighted by plummeting costs for clean, advanced technologies that can more efficiently replace legacy power plants. No place is facilitating the energy transition more beneficially for consumers and the environment than Texas, which boasts the most robust competitive marketplace in the country.

In a new policy paper, R Street senior fellow and electricity policy manager, Devin Hartman examines the Texas electricity market since the retirement of a number of coal plants in the state earlier this year. The move, which initially prompted capacity concerns, has sparked creative maneuvering among suppliers and consumers to manage their costs, financial risks, and preferences for things like power quality and green power.

The paper argues that recent price fluctuations indicate a healthy market, which provides the proper signals to investors about where, when and how to invest. They also provide an incentive for active consumer participation like shifting consumption and investing in back-up generation.

To be sure, Texas has the most consumer-friendly electricity policy in the country, as evidenced by downward pressure on retail rates and an array of product offerings. The author adds, “Texas has the best market structure to signal resource investment and integration, especially for variable and use-limited resources, suggesting that it offers the best model for affordable decarbonization in the country.”


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