Has retail competition reduced residential electricity prices in Texas?

J. Zarnikau*, K. H. Cao, H. S. Qi, C. K. Woo

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

2 Citations (Scopus)

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.

Original languageEnglish
Article number101657
JournalUtilities Policy
Volume84
DOIs
Publication statusPublished - Oct 2023

Scopus Subject Areas

  • Business and International Management
  • Transportation
  • Sociology and Political Science
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Energy(all)
  • Economics, Econometrics and Finance(all)
  • Law

User-Defined Keywords

  • Retail competition
  • Electricity market restructuring
  • Residential electricity prices
  • Synthetic control
  • Texas

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