The Texan Command Economy

Say your town had a bread shortage: should the price of bread be raised 300 times to help conserve it?

A big snowstorm hit Texas. State regulators responded by pegging the price of electricity at $9/kWh, 300 times spot price.

On the surface, this doesn't seem a terrible idea. Regulators were worried that energy might run out. In theory, artificially raising the price would incentivize generator companies to create more electricity, and for consumers to use less.

A few days later, Texas homegoers now pay hundreds of dollars a day for electricity. 22 power companies have defaulted, where some are forced to buy electricity at ridiculous prices to resell at fixed monthly rates. Texas is now left with 6.6k MW of idle energy reserves, well above the 1k MW margin of safety. Perhaps unintentionally, energy generation companies made fortunes selling gouged electricity.

Texas fiddled with its own precious independent energy sector, and consumers paid the exuberant price.

Thus, the "lone star state" is no less effected by American top-down government intervention than the rest of the country.

Every top-down legislation or mandate is harmful to individual market participants. Moving forward, we should expect even more negative externalities and "unforeseen consequences" from American regulators.