Free Market Energy Report
Free Market Energy Report
Renewable EnergySubsidiesTexas Electric Grid

Study: The Government-Imposed Cost of Electricity in Texas

Bill Peacock

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.

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.

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Bill Peacock

Bill Peacock, the editor of Free Market Energy Report, has spent the last 30+ years fighting for liberty at the local, state, and national level by combining his love for theology, economics, and public policy. He has worked in the Texas Legislature, with two state agencies, and for the Texas Public Policy Foundation. His work on energy issues spans more than 20 years. Bill wrote a chapter, The Energy-Climate Connection, in the book, Climate and Energy: The Case for Realism. Bill also writes at ExcellentThought on Substack, about the intersection of faith, culture, and public policy. In his work and writing, he focuses on various issues including energy, regulatory, and fiscal policy, property rights, public education, and the relationship between faith, free markets, and economic prosperity. Bill lives with his wife and son in the Texas Hill Country where they attend a Reformed church.