Texas PUC Previews State's Deregulation

In a new report that previews what to expect with the advent of retail competition in the electric industry, the Texas Public Utility Commission submitted its findings to the state's legislature last week. Explaining the problems "some areas of the country," had with deregulation, PUC reported it is convinced that Texas' rules will benefit the economy and "bring vibrant competition."

The state will slowly ease into retail competition, beginning with a pilot project in certain parts of Texas this June, followed by full competition in January 2002. In its report, PUC said it structured the new rules to "create an environment in which there are many producers and sellers, receptive customers, clear commercial rules and the infrastructure to permit vibrant competition."

Optimistic about the success of retail competition in the state, the report states that "we have been able to benefit from the experience of other countries and states were retail competition was introduced earlier, and the rules .developed in Texas have taken the best features of these other areas and avoided the worst features."

The report describes the commission's efforts to implement Texas Senate Bill 7, enacted in 1999, which allowed competition in the retail sale of electricity. The bill included a significant amount of detail about how retail competition may be conducted, and PUC then refined it and adding rulemaking proceedings to define how the actual market will operate.

PUC also worked with the Independent System Operator for the Electricity Reliability Council of Texas (ERCOT) to develop the trading rules for the wholesale market, which are detailed in the report. ERCOT, said PUC, "appears to be on schedule to have the trading rules and computer systems ready to implement pilot projects in retail competition in June 2001 and full retail competition beginning in January 2002."

A full copy of the report may be downloaded on PUC's website at www.puc.state.tx.us.

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