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TU Backing Texas Deregulation Bill Now in House

TU Backing Texas Deregulation Bill Now in House

Dallas-based Texas Utilities said it supports a bill to deregulate Texas' $19 billion electric industry. The proposal was passed Wednesday by the House State Affairs Committee by a vote of 13 to 2 and now goes to the full House for consideration.

"We want to see the bill remain intact because it represents some positive steps for the small consumer and overall growth of the state," said Tom Baker, president of TU Electric's distribution business unit.

Baker said the bill offered by Rep. Steve Wolens may not be exactly as Texas Utilities would have written it, but the pluses now outweigh the minuses. "It is time for Texas to move forward to electric industry restructuring, and this bill offers a good vehicle. It ensures that all customers will benefit, that reliability is maintained, that competition will be fair, and that the past obligations and investments that built and are sustaining today's electric infrastructure are honored," he said.

The current bill would freeze rates of investor-owned utilities until competition begins Jan. 1, 2002, and then would lower those rates 6%. Appropriate consumer protections would have to be followed by all retail electricity providers. The first-ever program to help low-income residents, including low-income elderly and disabled, pay bills and improve home energy efficiency would be established.

Stranded cost recovery is provided, and securitization may be used as a mechanism for recovering those costs. Securitization reduces costs to customers and is the most economical method of cost recovery. In addition, a "system benefit fund" will be established to fund customer education and low-income assistance programs, and to replace reductions in state and local property tax revenues that may result from restructuring the electric industry.

The Texas Senate in March passed an earlier electric deregulation bill, but since the proposed legislation has changed, the Senate would have to approve the bill currently in the House should it pass. The Texas legislative session ends May 31.

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