Electric Power Deregulation: Potential Impacts on Irrigated Crop Production in the Texas High Plains

Abstract

Deregulation of the electric power industry has the potential to broaden the electric power markets in Texas by providing consumers with the ability to purchase their electric power needs from more than one supplier. Yet, not all segments of the consuming public may benefit from deregulation, in particular the agricultural industry in the Texas High Plains (THP), which is a major consumer of electricity for irrigation during the peak summer consumption period. The objectives of this study were to estimate the impacts on irrigated crop production in the THP from increasing electric power rates, and determine the associated impacts on the THP regional economy from changes in agricultural production. Nineteen county-level linear programming models (LP) were used to estimate the effects of increased electric rates on crop production.  Key findings indicated that regional economic impacts from increasing electricity rates appear to be minor, yet farm level impacts could have a greater relative effect.