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Find About Regulation – Oversight on Utilities in Texas

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Regulation and Oversight of Utilities in Texas

PUC was created by the 1975 Texas Legislature to regulate telecommunication and electric services in Texas. Texas was the last state to create a utility commission. <<<>>>

PUC comprises three commissioners appointed by the governor, each serving a six-year term. In 1995, the Legislature restructured (or "deregulated") the state's wholesale electric market to begin September 1, 1995, and in 1999 deregulated the retail segment in some parts of Texas to begin on January 1, 2002 (see below for a more detailed consideration of deregulation). 36 The term "deregulated" as applied to the retail segment of the industry means the Legislature removed monopoly regulations from the investor-owned utility areas within ERCOT to allow new entrants to compete for customers in a free market. Deregulated areas are also called "competitive areas" or areas "open to electric choice" because their electric service is no longer provided by one utility. Under retail competition, retail electric providers sell electricity to consumers and businesses, and provide customer service functions such as billing, rate plans and choices of renewable or other energy sources. Deregulation brought new rules intended to ensure fair competition and protect consumer's rights. As noted above, areas within ERCOT that are served by publicly owned or member owned utilities, such as cooperatives and municipalities, known as NOIEs, were not automatically opened to retail competition, although these utilities may choose to opt into the competitive market. Nueces Electric Cooperative is the only entity to opt in thus far. 37 Under retail competition, retail electric providers sell electricity to consumers and businesses, and provide customer service functions such as billing, rate plans and choices of renewable or other energy sources. All REPs must be certified to do business by PUC. REPs may compete for customers, both residential and commercial/industrial, by offering lower prices, a variety of service plans, different renewable energy choices or better customer service and can operate in any deregulated area. Lightblub.better.idea 1 summary

PUC is responsible for in Texas

PUC is responsible for regulation of rates and terms for intrastate transmission service and for distribution service in areas where customer choice has been introduced >

>> /h5> " oversight of the ERCOT market, including market monitoring and the ERCOT administrative system administration fee; " adopting and enforcing rules relating to retail competition, including customer protection and the state's renewable energy goals; " retail rate regulation outside of ERCOT; " licensing of new transmission facilities for investor-owned utilities and cooperatives; and " licensing of retail electric providers. PUC has adopted customer protection rules that affect retail electric providers in several ways. REPs: " must follow PUC standards to investigate customer complaints; " may not discriminate; " may not switch a customer's service without his or her permission. This practice is called "slamming" and it is illegal; " may not release any customer-specific information to any other company without the customer's permission; " must provide customers with an Electricity Facts Label (discussed below); " must provide customers with a terms-of-service agreement; " must disclose to customers their rights concerning choice of providers and the ability to switch; " must provide customer information in English and Spanish; and " must offer customers an average payment plan option to help distribute electricity payments evenly over the year, rather than billing customers for usage by month. Lightblub.better.idea 1 summary

Industry Structure on Electricity in Texas

The electric industry's structure varies depending on the ownership of the entity providing the electric service (FERC or competitive) and the geographic location of the customer (inside or outside ERCOT). <<<>>>

In most traditionally-regulated retail areas of Texas (outside of ERCOT), vertically integrated utility companies control the complete process of providing electricity, including electric generation, transmission, distribution and retail customer sales. (It should be noted that some NOIEs may not participate in all three areas.) INVESTOR-OWNED UTILITIES IOU are private, shareholder-owned companies ranging in size from small local operations to large multi-state holding companies. MUNICIPALLY OWNED UTLILITIES MOUs are publicly owned, nonprofit utilities that generate or purchase power and control its distribution to area residents ELECTRIC COOPERATIVES Electric cooperatives are private, nonprofit utilities owned and controlled by the members they serve. Cooperatives pay no federal taxes, but do pay state property taxes. RIVER AUTHORITIES Between 1929 and 1949, Texas formed four river authorities to manage water resources and produce electricity. These are the Lower Colorado, Brazos, Sabine and Guadalupe-Blanco river authorities, all of which still operate today Information obtained http://www.window.state.tx.us/specialrpt/energy/uses/electricity.php Lightblub.better.idea 1 summary
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