Government Policies Hiked Texas Electricity Costs by Almost $20 Billion Last Year
Government-imposed electricity costs rose from 6.78 percent of total electricity costs in 2014 to 41.24 percent in 2021.

Luca Cacciatore | July 19, 2024

https://texasscorecard.com/state/government-policies-hiked-texas-electricity-costs-by-almost-20-billion-last-year/

Policies subsidizing generators, utilities, and unreliable energy have raised the cost of electricity in Texas by $19.9 billion in 2023, constituting 42.7 percent of total electricity costs.

In a study published Wednesday by the Energy Alliance, the group found that the total government-imposed cost of electricity in the Texas Interconnection operated by the Electric Reliability Council of Texas was $84.3 billion.

Texas state and local governments are responsible for causing 85.7 percent of that $84.3 billion.

“The massive increase in subsidies has done nothing to address the primary cause of unreliability in the Texas market, renewable energy,” stated Bill Peacock, the report’s author. “All it has done is to make electricity more expensive for Texans.”

The Energy Alliance’s research also found that government-imposed costs have risen drastically as a percentage of total electricity costs over the last decade.

In 2014, government-imposed costs accounted for only 6.78 percent of the total cost, representing roughly $2.1 billion of the $31.3 billion spent. However, by 2021, that number skyrocketed to a new record of 41.24 percent of the total, nearly $20.5 billion of the year’s $49.7 billion.

Peacock concluded that, apart from construction efforts by the state legislature-created Texas Energy Fund last year, most rising subsidy costs can be attributed to unreliable initiatives to incorporate wind and solar energy.

He particularly pointed to the state’s response to Winter Storm Uri, which illustrated both problems. Instead of ending unreliable energy subsidies, “policymakers decided to throw more taxpayer dollars at all generation sources.”

“Continuous subsidies for renewable energy have compromised grid reliability and increased costs,” explained Peacock. “Eliminating all subsidies, instead of increasing them, is the only path toward a reliable, affordable supply of electricity for Texans.”

Between 2014 and 2018, unreliable energy subsidies represented $9.4 billion of Texas’ total $14.7 billion in ERCOT costs. From 2024 until 2028, the cost of unreliable energy subsidies is projected to be upwards of $29.2 billion, with ERCOT’s total costs being around $69.9 billion.


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