Legislation that could give Texas electric customers substantialrefunds because of “unintended windfall” profits made through thecoming deregulation of the state’s utilities is making its waythrough the Texas House. Under the current law, large utilities maykeep earnings made through 2004 to offset the costs of investing innuclear power plants.
However, the nuclear plants, which were considered anunprofitable source of electricity when the 1999 deregulation lawwas passed are now more valuable because the cost of fuel has notgone up while natural gas costs have risen. Rep. Sylvester Turner(D-Houston) said HB 2107, which he is co-sponsoring with Rep. KevinBailey (D-Houston), would require the Texas Public UtilityCommission to return the money to cover the stranded costs to thosenuclear plants next year.
Even though state lawmakers crafted the deregulation law tocover unforeseen events, last month current PUC Chairman Pat WoodIII said that the legislature should address the changing marketconditions and advise his commission about how to deal withstranded cost collection.
At a news conference last week, Turner said that because themarket has changed, “companies don’t deserve to keep this money.”He said it was “past time for a refund.”
Even though nuclear plants are competitive now, Houston-basedReliant HL&P officials believe it could be a temporarysituation. While nuclear and coal plants are competitive now,Reliant said that the value is only an estimate. The true test,said Reliant, would come if a utility tried to sell a nuclearplant.
Texas’ deregulation does not officially begin until January2002; however, utilities involved in a pilot program have begun asign-up program, which will begin in June. The pilot program isdesigned to reach 5% of the state’s current electric customers.
Carolyn Davis, Houston
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