Electric Reliability Council of Texas (ERCOT) to be the authority to oversee grid reliability and operations so as to ensure no particular buyer or seller would gain an unfair advantage in the market. The "price to beat" Included within SB7 was the notion of the "price to beat" or PTB, an idea of a regulated rate governing the pricing behavior of the former utilities. According to a typical economic theory, prices are optimally determined in a fair and transparent market, and not by a political or academic body. In deregulation of electricity markets, one immediate concern with pricing is that incumbent electricity providers would undercut the prices of new entrants, deterring competition with extensive barriers to entry. This would perpetuate the existing natural monopoly of providers. Thus, the SB7 bill introduced a phase-in period during which a price floor would be established (for incumbent electricity companies) to prevent this predatory practice, allowing new market entrants to become established. New market entrants could charge a price below the price to beat, but incumbents could not. This period was to last from 2002 to January 1, 2007. As of 2007 Texas investor owned utility affiliates no longer have price-to-beat tariffs. In order to prompt entry into the market, the price to beat would have to be high enough to allow for a modest profit by new entrants. Thus, it had to be above the cost of inputs such as natural gas and coal. For example, a price to beat fixed at the actual wholesale procurement price of electricity does not give potential entrants a margin to compete against incumbent utilities. Second, the price to beat would have to be reasonably low, to enable as many customers as possible to continue to consume electricity during the transition period. Results Electricity prices Although a desired effect of competition is to lower electricity rates, the residential rate for electricity increased seven times in the four years after deregulation. Nationwide data from the U.S. Energy Information Administration shows that Texas's electric prices did rise above the national average immediately after deregulation from 2003 to 2009, but from 2010 to 2015, prices dropped significantly below the national average price, with a total cost of $0.0863 per kWh in Texas in 2015 vs. $0.1042 nationally, or 17 percent lower in Texas. Between 2002 and 2014 the total cost to Texas consumers is estimated to be $24 billion, an