Texas governor-elects plan to freeze electricity prices raises questions over legal authority

On her first day in office, Texas Democratic Gov.-elect Gina Hinojosa plans to freeze residential electricity rates in response to what she described as an affordability crisis.“On Day One as governor, I’ll freeze residential electricity rates and make corporations finally pay their fair share,” Hinojosa said in an interview with a local energy data group.She reiterated the plan in an interview with the Texas Tribune, stating, “Within an hour of taking the oath of office, I will declare a high-cost emergency in the state of Texas and issue an emergency executive order to … freeze electricity rates.”  The plan is raising concerns that such a freeze will clash with Texas’ uniquely competitive energy sector, which relies heavily on free-market choice, and that it could inadvertently create energy shortages as suppliers are prevented from adjusting their prices.That’s the concern of Nick Loris, the president of C3 Solutions, a conservative coalition for climate solutions that focuses on energy, environment and agriculture policy.He expects the emergency declaration will face legal challenges almost immediately from energy providers.

In particular, he cast doubt on the scope of the emergency declaration.“The Texas Disaster Act lets the governor declare disasters and suspend the regulatory laws and statutes that are in existence.But I think there is a high degree of skepticism, both from courts but also from state policymakers, that this warrants such a claim — and that it is such a disaster,” Loris told Fox News Digital.“I would imagine if there were legal challenges, it would come from those affected parties,” he added.Loris explained that Texas has fostered one of the most competitive energy environments in the country.In 1999, the state passed Senate Bill 7 — a piece of legislation that opened most of the state to retail choice, allowing customer to pick their preferred retail electric providers (REPs), beginning in 2002.“The legislatu...