Overview
- Gov. Greg Abbott unveiled the proposal Tuesday in San Antonio to require municipal utilities such as Austin Energy and CPS Energy to join Texas’ competitive retail market and said he will push for statutory changes in the 2027 legislative session.
- Abbott claims customers in Austin and San Antonio could see roughly 10% to 13% average bill reductions, but he has not released the data or methodology behind those savings and municipal officials dispute the numbers.
- City leaders and utility executives say deregulation would carry high technical and fiscal costs, with Austin warning of more than $1 billion in transition expenses for new meters and software and San Antonio noting CPS Energy transfers about 14% of revenue, roughly $500 million last year, into the city general fund.
- Municipal and industry groups including the Texas Public Power Association argue municipal utilities are not-for-profit, often have lower rates and provide local services, and they warn that turning service over to for-profit retail providers could raise bills and reduce customer protections.
- If the governor moves forward, the change would affect more than 70 municipal utilities and trigger political, legal and budget fights in the Legislature, with past examples like Lubbock’s 2024 entry into the competitive market showing mixed results on residential rates.