THE GOVERNMENT- IMPOSED COST OF ELECTRICITY IN TEXAS

Bill Peacock

Key Points

• Total Cost Increase: Government actions increased Texas electricity costs by $19.9 billion in 2023.

• Percentage Impact: This increase represented 42.7% of the total electricity cost in ERCOT areas.

• 10-Year Cost Impact: Over the last decade, government-imposed costs (GIC) added $84.3 billion to Texans' electricity bills.

• Policy Decisions: Continuous subsidies for renewable energy have compromised grid reliability and increased costs.

• Projected Future Costs: From 2024 to 2028, GIC is expected to add at least $67.9 billion to electricity costs in ERCOT.

• Subsidy Breakdown: Renewable energy subsidies are projected to constitute $27.2 billion of the future costs.

Executive Summary

Government-imposed policies increased Texas electricity costs by nearly $20 billion in 2023, accounting for almost 43% of the total costs in ERCOT areas. Over the past decade, these policies have added $84.3 billion to Texans' electricity bills, with state and local governments being major contributors. The report highlights how continuous subsidies for renewable energy have degraded grid reliability and driven up costs. Notably, in 2019, government-imposed costs doubled due to PUC adjustments. The newly introduced ERCOT Contingency Reserve Service alone added $12 billion to 2023 wholesale electricity prices. Looking ahead, these costs are projected to rise further, with GIC expected to add $67.9 billion from 2024 to 2028.