When electric deregulation begins in Texas next January, thestate’s largest utilities, Reliant Energy Inc. and TXU Corp., mayhold an unfair advantage because they own natural gas distributioncompanies. To level the playing field, the Texas Public UtilitiesCommission is working to amend the Gas Utilities Regulatory Act,and once formal legislation is introduced, the state’s smallerutilities are expected to lobby for its passage.
In its recent annual report to the legislature, the PUC saidcertain amendments would prevent the “development of a potentiallyanti-competitive situation involving affiliated natural gasutilities and electric utilities.” Reliant owns Entex while TXUowns Enserch, which are two of the state’s largest natural gaslocal distribution utilities.
The PUC wants to revise the regulations by adding a provision tothe act that would require local distribution companies to offercombination billing or rebranding to all electricity retailers withthe same terms and conditions as it does for its affiliated retailelectric provider.
The PUC said that under the unbundling requirements of theomnibus deregulation bill, Senate Bill 7, incumbent electricutilities would create affiliated electric retailers. As it standsnow, TXU and Reliant would be affiliated with an electric retailerand their ability to combine gas and electric billing or servicecould make it difficult for other retailers to compete. The currentregulations also would allow an affiliated electric retailer todirectly provide gas service by rebranding the service under itsown name.
If a customer were to choose an electric retailer that isaffiliated with the local gas distribution company, he couldreceive one bill for both gas and electric service, but the PUCsaid it would be an unfair advantage “to two companies that areincumbent utilities and are affiliated with gas utilities.”
Still in the preliminary stages, no formal legislation has beenintroduced in the legislature. The PUC still needs the authority ofthe Texas Railroad Commission, which oversees natural gas issues inthe state, and both regulatory agencies have met but no opinionshave been issued.
Carolyn Davis, Houston
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