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TX Reps Want Dereg Control, OK Opts to Wait

February 5, 2001
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TX Reps Want Dereg Control, OK Opts to Wait

Though they've been told again and again by state regulatory officials that a California crisis can't happen in Texas, two Houston lawmakers have filed legislation to expand the state's authority to limit electric deregulation, which begins on a pilot basis in June. And in Oklahoma, legislators have decided to postpone deregulation for at least two years.

California's problems, it seems, now are affecting other states' deregulation plans.

Texas, well on its way toward full deregulation, begins a pilot program in selected parts of the state this June. Then, next January, the entire state is deregulated. Even though the Texas Public Utilities Commission reports that it is well prepared and faces no problems remotely similar to what is happening in California, some legislators are starting to worry.

State Rep. Sylvester Turner, a member of the Texas House State Affairs committee who helped draft the original deregulation law in 1999, introduced House Bill 918, which would allow regulators to extend price limits on residential electricity, limit wholesale electric prices and suspend certain regulation-related collections from taxpayers. Co-author Rep. Kevin Bailey said the California problems led to the new legislation.

"We both have concerns about what's happening in California," said Bailey. "What we're saying is, if there are signs that dereg is not going to work, let's put the brakes on it."

The Texas PUC noted that the state's law already gives PUC authority to delay competition under certain conditions. However, Bailey said the new legislation would clarify those conditions. It also gives regulators more authority to limit deregulation after it takes full effect in 2002.

To ward off unforeseen problems, the Texas PUC last week said it would consider giving utilities more flexibility in how they would offer a 6% rate cut that is mandated when statewide deregulation begins. This way, more customers might not see a reduction in their summer bills, but would have a larger cut in their winter heating bills. PUC Chairman Pat Wood III said that an electricity provider could leave rates the same from May through September and then cut them 12% in the winter months of October through April.

For Oklahoma, which was not as far down the deregulation road, state legislators now are planning a more leisurely route, saying they will push back their deregulation plan for "at least two years." Rep. Larry Rice, who chairs the House energy and Utility Regulation committee, said the delay "seems to be a pretty popular consensus." He said he thought industry needed time to "get their companies ready for it, physically, and also to educate the consumers."

In 1997, the Oklahoma Legislature set July 1, 2002 as its goal to implement deregulation, and it had expected to take up the issue in earnest next month when it reconvened.

"We've got to make sure that everyone has a comfort level," Rice said. "Even though we're totally different from California, perception is what we deal with."

Carolyn Davis, Houston

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