Texas is leading the nation in Energy Deregulation. Because of the planning and implementation of a very efficient Energy Deregulation and Operating System by the Texas Legislature, Texans can now enjoy the benefits of competition. Texas created the Electric Reliability Council of Texas.
The mission of the Electric Reliability Council of Texas (ERCOT) is to direct and ensure reliable and cost-effective operation of the electric grid and to enable fair and efficient market-driven solutions to meet customers’ electric service needs.
The ERCOT grid covers approximately 75 percent of the land area in Texas.
The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to approximately 20 million Texas customers – representing 85 percent of the state’s electric load and 75 percent of the Texas land area.
As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 38,000 miles of transmission lines and more than 500 generation units.
ERCOT also manages financial settlement for the competitive wholesale bulk-power market and administers customer switching for 5.9 million Texans in competitive choice areas.
Balanced market rules are a basic element in Texas competition. Clear, predictable and well-designed rules help foster a stable electricity market. Electric Reliability Council of Texas (ERCOT) market rules are developed by participants from all aspects of the electricity industry. The rules and amendments are reviewed by the Public Utility Commission of Texas to ensure that they satisfy the public interest.
Texas lawmakers changed state law to allow customers to have more control over their purchase of electric service because they believe competition is good for Texas. Over time, competition for electric service is expected to lower rates and speed the development of new products and services.
WHAT HAS CHANGED?
In the past, one company provided all parts of your electric service (generation, transmission and distribution, and retail sales). With competition, these parts are separated into different companies. Generation, or production of electricity, was deregulated in 1995, resulting in an ample supply of new, cleaner and more efficient power plants throughout Texas.
The actual delivery of electricity across poles and wires to your home is called transmission and distribution. These services are provided to you by your local wires company, which is responsible for maintaining the poles and wires, and responding to emergencies and power outages as always. The Public Utility Commission continues to regulate transmission and distribution to ensure the safety and reliability of your electric service.
With electric competition, Retail Electric Providers sell electricity to you and provide functions such as customer service and billing. Retail Electric Providers compete for your business by offering lower prices, renewable energy options, added customer service benefits or other incentives.
No matter which Retail Electric Provider provides your service, the Public Utility Commission continues to enforce customer protections and regulate the delivery of electricity to ensure it is delivered safely and reliably by the local wires company .
Competition also is expected to create new jobs, stimulate economic development and help our environment.
All Retail Electric Providers must adhere to Public Utility Commission of Texas (PUC) rules and regulations designed to protect you against fraudulent, unfair, misleading, discriminatory or anti-competitive practices.
These protections include:
Non-Discrimination: In addition to standard discrimination prohibitions, a Retail Electric Provider may not deny service or discriminate in the marketing of electric service based on a customer’s income level, location in an economically distressed area, or qualification for low-income or energy efficiency services.
Slamming and Cramming: Slamming is switching your electric service provider without your permission. Cramming is adding charges to your electric bill for additional services without your permission. Both slamming and cramming are illegal.
Dispute Resolution: Retail Electric Providers must promptly investigate customer complaints and customers have the right to make complaints about a Retail Electric Provider to the PUC.
Privacy of Information: No Retail Electric Provider can release any customer-specific information to another Retail Electric Provider or any other companies without your permission.
Safety and Reliability: No matter which Retail Electric Provider you choose, the Public Utility Commission continues to enforce customer protections and regulate the delivery of electricity to ensure it is delivered safely and reliably by the local wires company.
DELIVERY OF ELECTRICITY
When you choose a new electric provider, you are choosing the company that provides or sells you electricity – a company called a Retail Electric Provider. These companies purchase electricity from competing power plants, and electricity is delivered to your home or business over the same poles and wires that are in your neighborhood today.
The actual delivery of the electricity (“transmission and distribution”) is still provided by your local utility, now called a local wires company. In a competitive electric market, your local wires company will continue to be responsible for maintaining the poles and wires that deliver electricity to your home or business. You and your neighbors can all have different Retail Electric Providers, but you all have the same local wires company.
An important message from the Commissioners regarding Electric Choice and the reliability of your electric service. – 01/05
REPAIRS AND EMERGENCIES
If you experience an emergency or power outage, you may call:
Your Retail Electric Provider, who will work with the local wires company to repair the problem, or connect you to your local wires company.
The number for repairs and emergencies printed on your electric bill.
Your local wires company as you do today.
KHOU-TV CH-11 NEWS
HOUSTON, TEXAS (June 6, 2006 Transcript)
Families across our area can save hundreds, even thousands of dollars if they would only switch to an
energy provider that charges less. But you know what, most people just won’t switch and we’ve wondered
why. 11 News reporter Jeremy Diesel shows us what he’s uncovered. You have the power to choose.
Power that can literally save you hundreds of dollars a year on your bill. But in the four years since electricity deregulation began in Texas only a little more than 25% of people in the Houston area have left Reliant Energy, even though the price it’s forced to charge is generally the highest.
Minnie Lee Coleman is like so many others. ” If it gets unbearable here I will cut it off and just sacrifice
something else to pay my electric bill. Because paying half and part I don’t do that.” Last night she told
us she’s willing to sacrifice. But not willing to leave Reliant for a cheaper price. “I don’t trust them. And
Houston Mayor Bill White is hoping to educate. “They should not question reliability as far as keeping
the lights on or what happens if there is a storm — who is going to turn back on the power.”
Here’s the deal, when deregulation happened five years ago, Reliant Energy divided into two completely
separate companies. Reliant which sells power and Centerpoint which delivers it. CenterPoint
owns the lines which carry power, maintain them and reads the meter no matter who your power
Come storm time, its CenterPoint which restores power to those who lose it. Not the power provider
you pay. All of the power companies Reliant, TXU, Green Mountain, Commerce and more than a dozen
others all put their power on the Texas grid. Its then used by everyone. Your meter read by CenterPoint
shows the amount you used. CenterPoint forwards that information to your provider who bills you.
“Who you buy your power from does not affect the reliability of that power. But it can affect your
Questions – General
Q: What has stayed the same in electric service?
A: Your current Transmission and Distribution Utility, or “local wires company,” continues to deliver electricity to your home. Your local wires company still responds to service interruptions and continues to maintain the poles and wires. You will continue to receive the same reliable service you are used to with your local wires company, regardless of which Retail Electric Provider you receive service from.
Q: What has changed in electric service?
A: You can now choose to buy your electricity from a different electric provider than the original provider for your area. These companies are called Retail Electric Providers. Additionally, your bill now looks different than bills you have received in the past, but each Retail Electric Provider provides the same standard information.
Q: Do all Texans have the power to choose their electric provider?
A: No. City-owned utilities and member-owned electric cooperatives have the option of giving their customers a choice of providers, or keeping things the way they are today. To see if competition is active in your area call toll-free 1-866-PWR-4-TEX (1-866-797-4839).
Q: What are the benefits of Electric Choice?
A: Texas’ electric rates are average, compared to the rest of the country, but our usage is among the highest in the nation due to demand for air conditioning during the long, hot summer season. Competition in other industries has often brought lower prices and innovative, new products and services. Having more control over your buying decision should make it easier to determine what matters most to you, whether it’s prices, renewable energy, customer service, or simply a name you know.
Electric competition also should help the environment because Retail Electric Providers must offer some energy from renewable energy sources. Renewable energy – such as wind, solar, hydroelectric and biomass (gas released from landfills) – produce less air pollution than sources that rely on burning coal or natural gas.
The Texas power market is one of the most attractive in the country for new investment. Forty-seven new power plants have been built or are being built in Texas since 1995 (that’s almost one-fourth of all power plants being built or planned in the nation). The properties represent a $10 billion investment in Texas. These plants provide jobs and sales and tax revenue into local Texas communities.
Q: How does Electric Choice affect electric rates?
A: The base rates for residential and small commercial customers of investor-owned utilities in Texas were frozen from September 1, 1999, to December 31, 2002. On January 1, 2002, rates for most of these customers were lowered, creating the “Price to Beat.” The Affiliate Retail Electric Provider cannot charge above this rate until it loses 40 percent of its customers or five years pass, whichever comes first.
Q: If electric rates are frozen, why does my electric bill rise?
A: Texas law allows the Affiliate Retail Electric Provider (the electric provider that was part of the original electric company that generated and sold electricity in your area, that now only sells electricity) to ask the PUC to adjust the “fuel factor” portion of its rate when there are significant changes in the market price of natural gas and purchased energy. These requests, which may be made twice a year, are subject to PUC review and approval. The cost of natural gas has increased significantly over the last year, and fuel factors have been increased to reflect the higher cost of natural gas. For more information on how natural gas prices change please review Questions and Answers Regarding Natural Gas Prices.
The Affiliate Retail Electric Provider is prohibited from making a profit on fuel costs. Competitive (or new to the area) Retail Electric Providers set their own electric service rates.
Q: With competition, will the reliability of my electric service change?
A: No. No matter which Retail Electric Provider you choose, your electricity will continue to be delivered safely and reliably by the local wires company, a company still regulated by the PUC.
Q: How does the new competition law protect the environment?
A: The law requires “grandfathered” power plants (those that predate the 1971 Texas Clean Air Act) to reduce nitrogen-oxide emissions by at least 50 percent and sulfur dioxide by 25 percent before May 1, 2003.
Encourages upgrade or retirement of older power plants to meet emissions standards by allowing utilities to recoup the costs of retrofitting or retiring certain older power plants.
Provides incentives for energy efficiency programs that will result in less demand for the production of electricity.
Requires retail electric providers to buy an additional combined 2,000 megawatts of Texas renewable electric generation capacity statewide by January 2009, from sources that include wind, solar, hydroelectric, biomass or geothermal.
Q: Do I have to switch from my current electric utility?
A: No. If you decide not to choose a new Retail Electric Provider, your service will be provided by the Affiliate Retail Electric Provider. The Affiliate Retail Electric Provider is the electric provider that was part of the original electric company that generated and sold electricity in your area, that now only sells electricity and provides customer service.
Questions – Changing Providers
Q: Is there a penalty for changing providers?
A: There is no switching fee unless you request a special meter reading at a time other than your regularly scheduled meter reading. There may also be penalties if you break an existing contract with your current Retail Electric Provider. Review your Terms of Service agreement for details.
Q: If I sign up with a new Retail Electric Provider, when will the switch to that company happen?
A: Customers can choose a Retail Electric Provider at any time; however, you will not begin to receive power from your new Retail Electric Provider until after your next regularly scheduled meter reading. Before you are switched, you will receive written confirmation in the mail. You will receive your first electric bill from your new Retail Electric Provider on the following billing cycle.
Q: Do I have a right to cancel?
A: Yes. You may cancel within three days from when you receive your Terms of Service agreement by contacting the Retail Electric Provider. If you are hand-delivered a terms of service agreement or you sign up for service using the Internet, there is a three-day cancellation period. The confirmation that will be mailed to you will also provide a way to cancel your switch.
Q: What happens if my Retail Electric Provider stops serving customers?
A: You will not be without electricity. Your Retail Electric Provider must give you 30 days’ advance notice to give you time to select a new provider. However, if you do not choose a new provider, your service will automatically be switched to the Provider of Last Resort for your area.
Q: If I do not choose an electric provider, who will supply my electricity?
A: If you decided not to choose a new Retail Electric Provider, your service is being provided by the Affiliate Retail Electric Provider. The Affiliate Retail Electric Provider is the electric provider that was part of the original electric company that generated and sold electricity in your area, that now only sells electricity and provides customer service.
Questions – Why is Texas different from California
Although Texas and California have similarly sized electric grids and similar growth in power demand, Texas put more than eight times the capacity online between 1996 and 1999 than California added.
The Texas power plant permitting process has a lead-time of two to three years to construct new power plants, while California’s lead-time is approximately seven years. Since 1995, 47 new power plants have been built or are being built in Texas, representing one-fourth of all power plants being built in the nation. California has built only two power plants since 1995.
New plant construction will allow power generators to easily meet the needs of residential and non-residential power users in our state.
Texas imports less than 1 percent of its power during peak power demand, compared to California, which imports at least 25 percent of its load during peak demand.
Long-term wholesale market contracts in Texas shield customers from price volatility. In Texas, power generators and Retail Electric Providers can negotiate wholesale power purchases for the lowest price, which benefits customers.
Texas enacted strong measures to protect customers during the transition to a fully competitive retail electric market. These measures have kept a lid on electric rates so Texas electric customers won’t see their electric bill double or triple.