Texas governor-elect’s plan to freeze electricity prices raises questions over legal authority

Key Points:

• Texas Democratic Gov.-elect Gina Hinojosa plans to freeze residential electricity rates on her first day in office to address what she calls an affordability crisis, declaring a high-cost emergency and issuing an executive order within an hour of taking office.
• The proposed rate freeze is raising concerns about conflicts with Texas' competitive energy market, which relies on free-market dynamics and retail choice, potentially leading to energy shortages if suppliers cannot adjust prices.
• Critics, including Nick Loris of C3 Solutions, expect legal challenges to the emergency declaration, arguing that the Texas Disaster Act may not justify such a move and warning that freezing rates could harm electricity providers financially.
• Texas operates an independent energy grid with over 100 retail electric providers offering consumers a variety of contract options, fostering competition since the 1999 Senate Bill 7 legislation that deregulated most electricity markets in the state.
• Hinojosa, who won the Nov. 3 gubernatorial race and will be sworn in on Jan. 19, 2027, has not yet commented on potential responses if the rate freeze leads to energy shortages.