Has retail competition reduced residential electricity prices in Texas?

Jay Zarnikau (), K.H. Cao, H.S. Qi and C.K. Woo

Utilities Policy, 2023, vol. 84, issue C

Abstract: We estimate the impact of introducing retail competition on retail electricity prices paid by residential consumers in Texas's two largest cities, Dallas and Houston. Using the synthetic control method to obtain the counterfactual prices, we find that retail competition raised average prices by $0.0112/kWh ($11.2/MWh) in the transition period from 2001 to 2006 and by $0.0134/kWh ($13.4/MWh) during the period of unfettered competition from 2007 to 2020. However, when the US wholesale natural gas prices are relatively low, actual retail electricity prices in areas opened to retail competition are close to the counterfactual prices that would have prevailed had retail competition not been introduced, as measured by the counterfactual prices estimated using the synthetic control method.

Keywords: Retail competition; Electricity market restructuring; Residential electricity prices; Synthetic control; Texas (search for similar items in EconPapers)
JEL-codes: L51 L94 Q48 Z18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:84:y:2023:i:c:s0957178723001698

DOI: 10.1016/j.jup.2023.101657

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