Texans have long championed free enterprise and competition. Over 25 years ago, our state was one of the first to deregulate most of our electricity market, unleashing billions in private investment and innovation. We know that when businesses compete, consumers win. Yet today, one critical part of our electric system remains shielded from competition by outdated policy.
When it comes to building high-voltage transmission lines – the “interstate highways” of our electric grid – Texas was a leader in using competition to reduce costs. But in 2019, Texas lawmakers quietly erected a barrier to competition in the transmission market. Senate Bill 1938 (SB 1938) granted incumbent utilities a Right of First Refusal (ROFR) for new transmission projects – banning new entrants from the Texas market.
The law now mandates that if a new power line will connect to a utility’s existing equipment, only that same utility can build and operate it. In practice, ROFR slammed the door on independent companies eager to invest in our grid. It “mutes what little competition exists in the power transmission market” and benefits incumbent utilities at the expense of new entrants and Texas electricity consumers.
Read more in RealClearEnergy here.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
