Abbott affordability plan pledges to lower electricity costs in some areas

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(The Center Square) – Gov. Greg Abbott is campaigning across the state, meeting with Texans in their homes and holding press conferences announcing parts of his “Keep Texas Affordable” plan. 

The latest is his plan to lower electricity costs for some Texans. Texas produces more electricity than any other state but its residents pay among the highest electricity costs. 

Abbott’s plan includes targeting utility monopolies, which he says are increasing costs. More than five million Texans live in an area with a single municipal power provider and aren’t able to shop around for cheaper electricity rates. 

The majority of them, 60%, are served by Austin and San Antonio electric utilities. The two metropolitan areas have the largest municipally-owned utility districts in the state. 

“We must address the cost of electricity that is putting a growing strain on Texas households,” Abbott said at a campaign event in San Antonio. “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. 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."

Abbott has proposed working with the state legislature to open city monopolies to retail electric competition. In Austin and San Antonio, for example, residential ratepayers would initially save an average 10% and 13%, respectively, on their electricity bills, the governor said. Commercial ratepayers would save an average of nearly 22%, or up to $3,000 per year, he said. 

The plan also includes enacting a law that bans city utilities from imposing charges on ratepayers unrelated to electric delivery and prohibits using utility profits as a city slush fund.

Austin’s leaders have been regularly accused of wasting taxpayer money related to energy projects. These include making fraudulent payments, spending hundreds of millions of dollars on a failed biomass power plant and other projects while increasing fees and taxes. 

San Antonio’s leaders used CPS Energy profits to finance a “Reproductive Justice Fund” to cover travel costs for residents to have abortions outside of Texas, The Center Square reported. Not only did the state of Texas sue to stop the program but the legislature also enacted reforms to prohibit such actions. The city also sought to source 100% of CPS Energy’s electricity from wind and solar, which have proven to be unreliable sources of energy.

Abbott’s proposal comes after many Texans saw their electricity bills double after Abbott and the legislature passed onto consumers billions in costs incurred by energy companies to winterize operations after Winter Strom Uri. The companies were forced to implement reforms after failing to winterize for decades. During the February 2021 storm, customers suffered for weeks from massive power outages, billions in losses were reported and people died from subfreezing temperatures. 

Two years ago, extensive power failures left Houston area residents without electricity in 100+ degree weather for weeks. In response, Abbott and the legislature enacted additional measures and he took action to ensure rates didn’t increase.

An Energy Alliance report found that Texas’ wholesale electricity prices from 2021 to 2023 were significantly higher than other states and increased by more than 200% from previous years. One reason Texas has high electricity prices is because of renewable energy subsidies, the Energy Alliance, Texas Policy Research and the Texas Public Policy Foundation argue. 

Biden administration renewable energy subsidies averaging $25 billion a year led to wind and solar flooding the grid while neither provide a reliable source of energy, they argue.

A TPPF report also points to Texas regulators increasing electricity prices by up to $2.5 billion a year in 2019. Costs would continue to increase until the legislature ends subsidies and “requires renewable generators to pay for the costs they impose on Texans,” it warned.

“The reasons for the higher prices are not surprising,” Energy Alliance Policy Director Bill Peacock said. “Texas has reacted to the problems caused by renewable energy subsidies by giving subsidies to thermal generators rather than ending its own renewable subsidies. Endless taxpayer subsidies to natural gas generators through the Texas Energy Fund and ERCOT’s Contingency Reserve Service won’t stop this as long as renewable generation is increasing.”

Abbott, who is running for his fourth term, has historically held a double-digit lead against opponents. He’s now statistically tied with a lesser-known opponent, state Rep. Gina Hinajosa, D-Austin, for the first time in his political career. 

In response to Abbott’s plan, Hinojosa said, “Always remember that San Antonio residents & most Texans face skyrocketing electric bills because Greg Abbott let gas companies make record profits during Uri. Then Abbott got $1 million from the gas company CEO."

“While multi-national corporations post record profits, Texans are paying more for groceries, housing, utilities, insurance, and so much more. Texas needs leaders who are willing to take on the corporate greed that is making life increasingly unaffordable for working families,” she argues. “Rather than incentivizing private equity and corporate giants, Texas should be providing opportunities for small business and working Texans to get ahead and thrive.”

Abbott's campaign did not immediately respond to requests for comment on Hinojosa's claims.