Predicting that Texas will have the most competitive and themost successful retail electric market in the country, Texas PublicUtilities Commissioner Brett A. Perlman said last week that thestate is on track to meet its deregulation date of Jan. 1, 2002.
“Our strong merchant plant development is the key to success fora vibrant retail market,” Perlman told participants meeting at theEnergy Economy 2000 meeting in Houston.
Despite the fact that Texas has just gone through its highestheat demand on record – 57,731 MW peak demand in the past month -Perlman said that the state would actually have a “supply glut”when the retail era begins.
“We’re going to have lots of excess capacity looking for homeswhen the retail market opens,” he predicted. With new power plantsin the design or construction stage, the PUCT commissioner saidthat by 2002, the state would have more than 88,321 MW total.
“All summer long, we’ve been asked the same question, ‘willTexas be like California,’ and I say the numbers speak forthemselves,” he said. He said that California had “made mistakes inthe way its retail market was structured,” mistakes that Texasregulators have been able to realize and learn from.
Perlman explained that PUCT is keying in on several areas toensure that the state’s deregulation plan is a success. Among themis $12 million customer education campaign, which he said would bein “several languages” to reach Texas’ diverse ethnic customer baseof 7.9 million. PUCT also plans to maintain its regulatoryauthority over transmission and distribution lines, and alsopromote renewable energy.
Customers will benefit under the Texas plan, said Perlman,because of price benefits, a 6% base rate decrease through 2005,expanded choice and structure and a structure to fuel economicgrowth. For utilities, Perlman said they would be able to lookforward to a “more certain industry framework, broaderopportunities for growth and full stranded cost recovery.
PUCT had set a goal of having about 2000 MW of renewable energyin place by 2009. “Some people thought that would be a tough figureto pull off, but we’ve already met it,” he said.
Just last week, TXU Electric & Gas announced it willpurchase 82.5 MW of wind energy from National Wind Power Ltd.’s andOrion Energy LLC’s Indian Mesa Wind Farm in Pecos County. In July,TXU announced a contract to purchase renewable wind energy from a160 MW farm in West Texas. It already purchases about 40 MW of windenergy from a facility near Big Spring.
Carolyn Davis, Houston
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