Dallas-based Texas Utilities supports a bill to deregulateTexas’ $19 billion electric industry. The proposal was passed lastweek by the House State Affairs Committee by a vote of 13 to 2 andnow goes to the full House for consideration.

“We want to see the bill remain intact because it representssome positive steps for the small consumer and overall growth ofthe state,” said Tom Baker, president of TU Electric’s distributionbusiness unit.

Baker said the bill offered by Rep. Steve Wolens may not beexactly as Texas Utilities would have written it, but the plusesnow outweigh the minuses. “It is time for Texas to move forward toelectric industry restructuring, and this bill offers a goodvehicle. It ensures that all customers will benefit, thatreliability is maintained, that competition will be fair, and thatthe past obligations and investments that built and are sustainingtoday’s electric infrastructure are honored,” he said.

The current bill would freeze rates of investor-owned utilitiesuntil competition begins Jan. 1, 2002, and then would lower thoserates 6%. Appropriate consumer protections would have to befollowed by all retail electricity providers. The first-everprogram to help low-income residents, including low-income elderlyand disabled, pay bills and improve home energy efficiency would beestablished.

Stranded cost recovery is provided, and securitization may beused as a mechanism for recovering those costs. Securitizationreduces costs to customers and is the most economical method ofcost recovery. In addition, a “system benefit fund” will beestablished to fund customer education and low-income assistanceprograms, and to replace reductions in state and local property taxrevenues that may result from restructuring the electric industry.

The Texas Senate in March passed an earlier electricderegulation bill, but since the proposed legislation has changed,the Senate would have to approve the bill currently in the Houseshould it pass. The Texas legislative session ends May 31.

Joe Fisher, Houston

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