Electric Rates Spark Effort to Aid Consumers

Tag : Power Transmission Product

They said pointing to super-low rates offered by some companies asevidence that deregulation is working might be a distortion of thetrue state of the market.
"We have a responsibility to make sure that the companies areviable, and not just a false picture that looks good," saidRep. Sylvester Turner, D-Houston.
Rep. Rene Oliveira, D-Brownsville, said there should be an"early warning system" so customers of fragile companiescan find a new provider before being switched to the last-resortplan.
Rep. Burt Solomons, R-Carrollton, asked Smitherman if the PUCneeded new legislative authority to get the information needed tograde companies' finances.
But Smitherman advised caution, saying that erecting barriers tonew companies entering the market could result in less competition.He said one of those start-up companies could end up being theelectric market's version of Southwest Airlines.
"I'm not sure we can ever create a market design that preventsanybody from going out of business," said Smitherman.
He said it is up to the marketplace to determine which companiesstay in business, and it is the PUC's job to make sure thatcustomers "are migrated to a better product" whencompanies go out of business.
Nobody lost power due to the business failures, he said.
High natural gas prices -- a key power plant fuel in Texas -- aredriving electric price increases, which also are affectingcustomers of municipal utilities and cooperatives. Those prices areat levels found after hurricanes Katrina and Rita in 2005, mainlybecause of high world demand for natural gas.
And then there is the weather.
Record temperatures in parts of Texas have caused peak electric usemuch earlier this summer. Twice this month the PUC has issuedconservation alerts.
High demand and congestion bottlenecks were blamed for huge pricespikes on the so-called balancing market that contributed to thefailure of the four companies.
The market is where the Electric Reliability Council of Texas,which manages the state's power grid, buys and sells power on15-minute intervals to keep the system in balance.
H.B. "Trip" Doggett, chief operating officer for ERCOT,said improvements to the wholesale market are expected next spring,when ERCOT switches to a new system of handling power load. Themultimillion-dollar redesign is meant to give ERCOT moreinformation about congestion in transmission lines on the grid andmore flexibility to handle it.
The new equipment was supposed to roll out in December, but vendorsupply issues are causing the delay, Doggett said.
The industry held out hope that consumers will eventually see areduction in their bills through "smart meters" andtime-of-day pricing, but it will be as long as a decade before useof those products is widespread.
Other witnesses said the state needs a more diverse power supply,including more coal-fired and nuclear power plants.
janet.elliott@chron.com
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