Texas Governor-elect, Democrat Gina Hinojosa, has already announced one of the first decisions she intends to make upon taking office in January 2027: declaring a state of emergency due to the high cost of living and ordering a freeze on residential electricity rates.
In an interview with The Texas Tribune, Hinojosa stated that
she will act almost immediately: "Within one hour of being sworn in, I
will declare a state of emergency due to the high cost of living in Texas and
issue an emergency executive order to freeze electricity rates."
The proposal is supposedly aimed at easing household expenses
and preventing residential consumers from absorbing the costs associated with
the growing energy consumption of large companies and data centers.
However, the announcement has already sparked a debate about
its economic consequences, the stability of the electricity market, and the
limits of the future governor's executive powers.
Can a governor freeze prices without affecting supply?
Texas has a competitive electricity market, where consumers
can choose from different providers and rate plans. Therefore, experts have
questioned whether Hinojosa has sufficient legal authority to impose a
widespread price freeze through an emergency declaration, supposedly due to the
high cost of living.
Hinojosa told the Texas Tribune that this is her number one
priority. Not the electrical grid. Not reliability. Price controls.
However, experts in the field assert that: “Freezing prices
does NOT lower energy costs. It makes it SCARCE: Producers stop building,
investment dries up, the grid weakens. Then the blackouts begin. Texas already
experienced Winter Storm Uri. We know exactly what happens when the grid is
overloaded and supply cannot meet demand. Families froze. Businesses closed.
There were deaths.
Now he promises to attack data centers—and the jobs they
create—while telling Texans he can provide cheap energy by executive order.
This is not an energy plan. This is Venezuelan economics with a Texas accent.
One hour after he takes office, the clock starts ticking” (Constitution X).