Et Tu, Ted? Why Deregulation Failed
Even Senator Cruz realizes kilowatt-hours aren’t like avocados.
Nobody is ever fully prepared for natural disaster. When hurricanes, blizzards or tsunamis strike they always reveal weaknesses — failure to plan, failure to invest in precautions.
The disaster in Texas, however, was different. The collapse of the Texas power grid didn’t just reveal a few shortcomings. It showed that the entire philosophy behind the state’s energy policy is wrong. And it also showed that the state is run by people who will resort to blatant lies rather than admit their mistakes.
Texas isn’t the only state with a largely deregulated electricity market. It has, however, pushed deregulation further than anyone else. There is an upper limit on wholesale electricity prices, but it’s stratospherically high. And there is essentially no prudential regulation — no requirements that utilities maintain reserve capacity or invest in things like insulation to limit the effects of extreme weather.
The theory was that no such regulation was necessary, because the magic of the market would take care of