TX PUC Wants Level Playing Field for Utilities

When electric deregulation begins in Texas next January, the state's largest utilities, Reliant Energy Inc. and TXU Corp., may hold an unfair advantage because they own natural gas distribution companies. To level the playing field, the Texas Public Utilities Commission is working to amend the Gas Utilities Regulatory Act, and once formal legislation is introduced, the state's smaller utilities are expected to lobby for its passage.

In its recent annual report to the legislature, the PUC said certain amendments would prevent the "development of a potentially anti-competitive situation involving affiliated natural gas utilities and electric utilities." Reliant owns Entex while TXU owns Enserch, which are two of the state's largest natural gas local distribution utilities.

The PUC wants to revise the regulations by adding a provision to the act that would require local distribution companies to offer combination billing or rebranding to all electricity retailers with the same terms and conditions as it does for its affiliated retail electric provider.

The PUC said that under the unbundling requirements of the omnibus deregulation bill, Senate Bill 7, incumbent electric utilities would create affiliated electric retailers. As it stands now, TXU and Reliant would be affiliated with an electric retailer and their ability to combine gas and electric billing or service could make it difficult for other retailers to compete. The current regulations also would allow an affiliated electric retailer to directly provide gas service by rebranding the service under its own name.

If a customer were to choose an electric retailer that is affiliated with the local gas distribution company, he could receive one bill for both gas and electric service, but the PUC said it would be an unfair advantage "to two companies that are incumbent utilities and are affiliated with gas utilities."

Still in the preliminary stages, no formal legislation has been introduced in the legislature. The PUC still needs the authority of the Texas Railroad Commission, which oversees natural gas issues in the state, and both regulatory agencies have met but no opinions have been issued.

Carolyn Davis, Houston

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