Though they’ve been told again and again by state regulatoryofficials that a California crisis can’t happen in Texas, twoHouston lawmakers have filed legislation to expand the state’sauthority to limit electric deregulation, which begins on a pilotbasis in June. And in Oklahoma, legislators have decided topostpone deregulation for at least two years.

California’s problems, it seems, now are affecting other states’deregulation plans.

Texas, well on its way toward full deregulation, begins a pilotprogram in selected parts of the state this June. Then, nextJanuary, the entire state is deregulated. Even though the TexasPublic Utilities Commission reports that it is well prepared andfaces no problems remotely similar to what is happening inCalifornia, some legislators are starting to worry.

State Rep. Sylvester Turner, a member of the Texas House StateAffairs committee who helped draft the original deregulation law in1999, introduced House Bill 918, which would allow regulators toextend price limits on residential electricity, limit wholesaleelectric prices and suspend certain regulation-related collectionsfrom taxpayers. Co-author Rep. Kevin Bailey said the Californiaproblems led to the new legislation.

“We both have concerns about what’s happening in California,”said Bailey. “What we’re saying is, if there are signs that deregis not going to work, let’s put the brakes on it.”

The Texas PUC noted that the state’s law already gives PUCauthority to delay competition under certain conditions. However,Bailey said the new legislation would clarify those conditions. Italso gives regulators more authority to limit deregulation after ittakes full effect in 2002.

To ward off unforeseen problems, the Texas PUC last week said itwould consider giving utilities more flexibility in how they wouldoffer a 6% rate cut that is mandated when statewide deregulationbegins. This way, more customers might not see a reduction in theirsummer bills, but would have a larger cut in their winter heatingbills. PUC Chairman Pat Wood III said that an electricity providercould leave rates the same from May through September and then cutthem 12% in the winter months of October through April.

For Oklahoma, which was not as far down the deregulation road,state legislators now are planning a more leisurely route, sayingthey will push back their deregulation plan for “at least twoyears.” Rep. Larry Rice, who chairs the House energy and UtilityRegulation committee, said the delay “seems to be a pretty popularconsensus.” He said he thought industry needed time to “get theircompanies ready for it, physically, and also to educate theconsumers.”

In 1997, the Oklahoma Legislature set July 1, 2002 as its goalto implement deregulation, and it had expected to take up the issuein earnest next month when it reconvened.

“We’ve got to make sure that everyone has a comfort level,” Ricesaid. “Even though we’re totally different from California,perception is what we deal with.”

Carolyn Davis, Houston

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