A $4 BILLION Dollar Electricity Tax May be Coming to You on December 7

The Public Utility Commission of Texas (PUC) is holding an open meeting on Friday, December 7 at which the commissioners might make changes to a pricing rule that would impose an electricity “tax” on Texas consumers as high as $4 billion a year.

Electricity generators and wind industry representatives asked the PUC in October to adopt the electricity tax because they claim aren’t making enough money.

If they don’t get the $4 billion payout from consumers, generators suggest they might not keep enough generation plants operating to keep the lights on for Texans.

The generators and the PUC commissioners are relying on a report from consultants who claim that Texas’ competitive electricity market can’t work and therefore the government has to step in to solve the problem.

Of course, that’s not the case. The PUC, generators, and consultants were saying the exact same thing in 2013—but it never came to pass.

The truth is that Texas’ electricity market is the most competitive market in the world and has provided Texans with an affordable, reliable supply of electricity for almost 20 years.

The market does face some problems today, but government is the cause of the problems, not the solution.

Specifically, the problems are caused by excessive regulation and by more than $15 billion of renewable energy subsidies in Texas since 2005 that have increased electricity costs and reduced reliability because of the unreliable nature of wind and solar energy.

There are other options that the PUC is considering. Whatever they choose, it should NOT include any increase in the price of electricity—$1 billion or even $500 million is too much. How much we pay for electricity is for the market, not the commissioners, to decide.

One thing the commissioners should do is make sure that renewable energy generators pay the costs they impose on the electricity grid and consumers because of their unreliability.

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NEW RESEARCH: Breaking the Bank, Robin Hood and Chapter 313

Under Chapter 313, important decisions about state funding for schools are taken out of the hands of lawmakers who are accountable to state taxpayers. In fact, Chapter 313 has played a major role in transforming the funding of Texas’ K-12 public schools into an extremely complicated and counterproductive game of ‘beggar thy neighbor.’

Despite public school officials in districts benefiting from Chapter 313 being highly in favor of the financial gains they’ve negotiated, little or no long-term educational benefit result from increased funding unaccompanied by meaningful changes in how students are instructed or how teachers are recruited and rewarded for their work.

“When the Texas Legislature convenes in January, legislators may decide whether or not the Texas Economic Development Act (Chapter 313) gets renewed,” said Cutter González, a policy analyst with the Texas Public Policy Foundation. “This paper exposes concerns about property tax abatements that show why lawmakers should keep decisions on state spending in their hands by by letting Chapter 313 expire.”

Key Points:

  • Chapter 313 tax abatements incentivize school districts to provide tax abatements to every business that applies because they can pass the cost on to taxpayers across the state.
  • Chapter 313 and Chapter 41, otherwise known as Robin Hood, jointly create a situation whereby relatively prosperous districts can raise revenues to fund their own operations more efficiently by granting tax abatements to businesses rather than by collecting taxes.

Read the Research

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