Republican Caucus Chair Responds to Partisan Attack Op-Ed Piece

August 12, 2008

State Representative Frank Corte

Democrat Jim Dunnam, who supported a competitive electricity market in Texas along with a majority of Democrats, is dead wrong with his historical facts and his view of the current market in his op-ed piece Friday, August 1 (“Utility Customers Pay for Wild West Ride”).

He intentionally misleads the reader by referencing a factually incorrect Wall Street Journal article about electric rates in Texas. Mr. Dunnam then uses the story to falsely conclude that Texas has some of the highest prices in the nation. In reality, the WSJ article was referring to a very small segment of the wholesale market; not the broader wholesale market where the majority of electricity is sold at a significantly lower price.

In fact, according to the Energy Information Administration (EIA) in December 2001 (about the time the electric market was opening in Texas) the state ranked 14th in terms of highest rates in the country. The most recent available data from the EIA found that the Texas ranking remains unchanged, and our rates are lower than other industrial states such as California, New York, Massachusetts, and New Jersey.

In addition, among states that depend heavily on natural gas, such as Texas, the Republican leadership has helped our state have the 5th-lowest residential electric price, according to the EIA despite the fact that natural gas prices have quadrupled over the last few years because of the higher-than-average use of natural gas in our state.

Mr. Dunnam also incorrectly claims that Texas uses more coal than any other state to produce electricity. Again, the reality is Texas uses less coal than most other states.

As strong stewards of our environment, the Republican leadership has taken environmental protection steps by reducing emissions every year since 1999. One of the one of the most important bills of the 2007 session was HB 3693, authored by Rep. Straus (R-San Antonio) and it passed almost by unanimous vote.

That bill raised energy efficiency goals for electric utilities from 10% of annual demand growth to 15% in 2008 and 20% in 2009.

When it comes to renewable energy, Texas is #1 in wind power production, with expectations that wind can provide 20 percent of all electricity capacity in coming years. Wind power has been a nonpartisan issue in both chambers of the legislature because of its effect on the environment; the effect being that wind does not pollute the air.

Last session, Chairman Phil King (Regulated Industries Committee) had legislation from his committee that set the stage for the Texas Public Utility Commission to approve a plan to build hundreds of miles of transmission lines from West Texas to the urban areas of Texas to speed wind power across the state.

The competitive market is not the only market being stung by high prices. There are dozens of other examples where non-competitive markets have historically high prices. San Antonio’s municipal electric system raised prices by more than 30 percent this summer. The City of Weatherford has seen city system prices double.

The bottom line in today’s global market-driven process is that thoughtful observers acknowledge that prices are part of a broader trend of rising energy prices everywhere, and not a failure of competition.

I welcome Mr. Dunnam’s suggestions for enhancing the competitive market in the next session. Getting affordable and reliable electricity to Texans in a manner that supports economic growth and job production is a bipartisan issue; not one that leaves divides between political parties.

Frank Corte, Jr.
Chairman, Texas House Republican Caucus