Every American feels the squeeze of rising energy costs. Nobody’s disputing that. But here’s what decades of economic history keep screaming at us – and what politicians keep ignoring: price controls don’t lower prices. They distort markets, punish providers, and leave consumers holding an even uglier bill down the road.
Democratic governors across the country have latched onto the same crude instrument lately – emergency declarations and rate freezes – as though commanding prices to stay put is the same as actually solving a problem. And now one incoming governor wants to take this failed strategy to the biggest energy market in America.
From Fox News:
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.”
Bold promises make great soundbites. But governing is a different animal entirely.
A power grab without the power
The uncomfortable truth for Hinojosa? She almost certainly lacks the authority to pull this off. Texas operates a decentralized energy market where retail providers – not the governor’s office – set electricity prices. Over 100 competing providers serve Texas consumers, a system built deliberately to keep government hands off the thermostat.
Nick Loris, president of C3 Solutions, told Fox News there’s “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.”
About that so-called “disaster” – Texas residential electricity prices rose 3.3 percent over the past year. That’s roughly the national average. Not a crisis. Not an emergency. A campaign slogan dressed up in legal language.
A playbook that’s already flopped
Hinojosa isn’t even being original here. New Jersey’s Gov. Sherrill tried the identical approach – emergency declaration, rate freeze, $500 million in taxpayer money thrown at the problem. The outcome? Residents reported bills that “nearly doubled.” Spectacular work. Georgia’s Public Service Commission froze base power rates unanimously, and prices still climbed 2.3 percent. Even New York Gov. Kathy Hochul – hardly a free-market crusader – had the good sense to reject rate freezes outright.
The real target
Texas built something genuinely impressive with Senate Bill 7 in 1999. Over a hundred retail providers competing for your business. As Loris described it, “It’s like shopping at a grocery store for cereal for your retail electricity.” Choice, competition, consumer power. Everything Democrats claim to support – until it actually exists without government supervision.
Price signals function like traffic lights. Freeze them, and you guarantee a pileup. Providers absorb losses they can’t sustain, investment dries up, and supply tightens. That’s not speculation. That’s basic economics.
This is the pattern that never changes. Democrats manufacture an “emergency,” seize control over a functioning system, and when the predictable wreckage arrives, they blame the very market they sabotaged. Texans built something worth defending. Whether their new governor respects that remains an open – and deeply troubling – question.
Key Takeaways
- Hinojosa likely lacks legal authority to freeze rates in Texas’s deregulated energy market.
- A 3.3% price increase matching the national average hardly qualifies as an “emergency.”
- Identical rate freezes in New Jersey and Georgia failed despite billions in taxpayer support.
- Texas’s competitive energy model delivers consumer choice – price controls would destroy it.
Sources: Fox News, Reason Magazine
