Texas moved a step closer to a restructured electricitymarketplace Wednesday when the state Senate approved a bill toderegulate electric utilities. The bill is now bound for the StateAffairs Committee of the House of Representatives. Hearings couldbe held as early as March 29. Gov. George W. Bush has voiced hissupport for electric deregulation.

The legislation would open most of the state’s electricutilities to competition – excluding municipally owned utilitiesand rural electric cooperatives – beginning Jan. 1, 2002. Billsponsor Sen. David Sibley, R-Waco, said deregulation would saveconsumers between $500 million and $800 million even if they don’tswitch suppliers as legislation calls for a 5% rate cut when ittakes effect. Stranded cost recovery is prescribed throughsecuritization with bond debt being repaid through a transmissionsurcharge. A similar bill failed to pass the Senate two years ago.

“This is the first time an electric deregulation bill has madeit out of either chamber,” said Ray Palmer, president of NEV Texas,subsidiary of energy service provider New Energy Ventures. “TexasSenators went out of their way to observe the early workings ofother competitive markets first hand, which gave them theopportunity to learn from the challenges already faced in thosestates and build on the successes of those markets.”

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