Abstract: “In the late 1990s, many states opted to restructure their electricity industry to introduce competition at the wholesale and retail levels. Texas designed competitive wholesale and retail markets that were far different from those developed in Pennsylvania and other states. How well has the Texas approach worked?
In one recent analysis, Zarnikau and his colleagues estimated the impact of introducing retail competition on retail electricity prices paid by residential consumers in Texas’s two largest cities, Dallas and Houston. Using the synthetic control method to obtain counterfactual prices, he found that retail competition raised average prices by $0.0112/kWh in the transition period from 2001 to 2006 and by $0.0134/kWh during the period of unfettered competition from 2007 to 2020. However, when wholesale natural gas prices are relatively low, actual retail electricity prices in areas opened to retail competition are close to the counterfactual prices that would have prevailed had retail competition not been introduced.”
Bio: Until he retired at the end of 2024, Zarnikau taught graduate-level courses in applied statistics, research methods, and energy economics at The University of Texas at Austin, where he earned his PhD in Economics. He started his career working at the Public Utility Commission of Texas. He was the Director of Electric Utility Regulation for four of the eight years that he worked there. For 18 years, Zarnikau was the president of Frontier Associates LLC, a consulting firm, which was acquired by The Gas Technology Institute in 2016. He has authored or co-authored over 120 articles appearing in academic and trade journals and has testified as an expert witness in roughly 50 regulatory proceedings in eight states.
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