Sam Houston Electric Cooperative

News > Electric Deregulation > Related Articles > Deregulation Delayed in Southeast Texas

On October 31, the Public Utility Commission accepted terms of a settlement stating that full electric retail competition will begin no sooner than September 15, 2002 for customers in Southeast Texas within the revised Southeastern Reliability Council (SERC) service area.

The ruling was made due to the fact that the customers of Entergy, the primary investor-owned utility in Southeast Texas, now have no choices in providers. "All the evidence shows that Entergy customers cannot enjoy the benefits of competition by January first," said PUC Chairman Max Yzaguirre. "We must protect their interests and make sure customer choice is available before opening the market." The PUC’s approved settlement agreement includes a process to help the Commission determine when the market can support competition.

The PUC’s decision affects electric customers across Southeast Texas including the ten counties served by Sam Houston Electric Cooperative. In accordance with the 1999 restructuring legislation, Sam Houston EC’s Board of Directors opted to take a “wait and see” approach in order to determine when or if the Cooperative will participate in the competitive market.

Sam Houston Electric will maintain the “wait and see” approach our Board of Directors adopted earlier this year. We will continue to monitor the progress of electric competition in other parts of Texas and will not participate in a deregulated electricity market unless we determine that it will be beneficial to our
member-owners.

Although the 1999 Electric Restructuring Law directed retail electric competition to begin January 1, 2002 in areas of Texas served by investor-owned utilities, legislation allows the PUC to delay full customer choice if a power region is unable to offer fair competition.

The 13-state-area Southeastern Reliability Council (SERC) is a regional electric grid serving Entergy and a number of municipalities and electric cooperatives, including Sam Houston Electric Cooperative. Texas law requires the Federal Energy Regulatory Commission to approve a regional transmission organization (RTO) for the SERC to qualify as a power region in order for retail competition to begin.

To date, an RTO has not been created and there’s been no marketing by retail electric providers in the Entergy area. Consequently, there has been no participation in the electric deregulation pilot project that began last June.

Other areas of Texas in which deregulation has been delayed include the entire Texas Panhandle, Northeast Texas, and the El Paso area.