In a new report that previews what to expect with the advent ofretail competition in the electric industry, the Texas PublicUtility Commission submitted its findings to the state’slegislature last week. Explaining the problems “some areas of thecountry,” had with deregulation, PUC reported it is convinced thatTexas’ rules will benefit the economy and “bring vibrantcompetition.”

The state will slowly ease into retail competition, beginningwith a pilot project in certain parts of Texas this June, followedby full competition in January 2002. In its report, PUC said itstructured the new rules to “create an environment in which thereare many producers and sellers, receptive customers, clearcommercial rules and the infrastructure to permit vibrantcompetition.”

Optimistic about the success of retail competition in the state,the report states that “we have been able to benefit from theexperience of other countries and states were retail competitionwas introduced earlier, and the rules .developed in Texas havetaken the best features of these other areas and avoided the worstfeatures.”

The report describes the commission’s efforts to implement TexasSenate Bill 7, enacted in 1999, which allowed competition in theretail sale of electricity. The bill included a significant amountof detail about how retail competition may be conducted, and PUCthen refined it and adding rulemaking proceedings to define how theactual market will operate.

PUC also worked with the Independent System Operator for theElectricity Reliability Council of Texas (ERCOT) to develop thetrading rules for the wholesale market, which are detailed in thereport. ERCOT, said PUC, “appears to be on schedule to have thetrading rules and computer systems ready to implement pilotprojects in retail competition in June 2001 and full retailcompetition beginning in January 2002.”

A full copy of the report may be downloaded on PUC’s website atwww.puc.state.tx.us.

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