AUSTIN ­ Texas' approach to restructuring its electric market is the best in the United States, according to a new study conducted by the Center for the Advancement of Energy Markets (CAEM). In its most recent bi-annual industry report card, the Retail Energy Deregulation (RED) Index, CAEM ranks states according to 22 attributes the Center has identified as the foundation for an effective transition to competition.

Texas, which more than doubled its 2001 score, leads all other states with a score of 69. "The RED Index update illustrates that when it comes to electric restructuring, Texas is doing it right," said Rebecca Klein, chairman of the Public Utility Commission of Texas (PUC)­ the agency responsible for overseeing the transition to a competitive electric market in Texas.

"For most people, shopping for electricity is still a new concept, but more and more Texans are taking advantage of new options available to them ­ and they're saving money as a result," Klein said. "There is still work to be done, but, overall, we're pleased with the way things are going."

Texas' retail electric market opened for full competition Jan.1, 2002.
More about the Center for the Advancement of Energy Markets
(CAEM) and its RED Index Report can be found at www.caem.org.

Hundreds of thousands of texas businesses and families already are realizing the benefits of electricity choice. According to the TPUC, the number of families that have switched electricity providers is approaching 200,000, while more than 50,000 business customers have switched (through June 2002).

Texas' retail electric market now gives most customers of investor-owned electric utilities the power to choose a new REP. Customers who did not choose a new REP by January 1, 2002 were automatically switched to their utility's affiliated retail electric provider (AREP). Large commercial customers (with a peak demand of 1 megawatt or more) that do not sign a contract with a competitive REP may negotiate rates and terms of service with the affiliate REP.

Competition is encouraging the development of reliable power supply as wholesale generators look for areas of the country that need additional generating capacity. According to the Department of Energy, wholesale generators added 51,000 megawatts of power in 2001 and 99,000 megawatts are scheduled to come on line in 2002. That's more electricity added to our economy than at any other period history.

On June 18, 1999, Gov. George W. Bush signed Senate Bill 7. The law is designed to give customers greater control and lower the price of electricity over time. It also is designed to make new services and products available and to assure continued reliable service.

Each investor-owned utility within ERCOT was required to separate, by January 1, 2002, into three separate functions: poer generation, transmission and distribution and retail electric provider (REP) services.

In 1992, the U.S. Congress empowered the Federal Energy Regulatory Commission (FERC) to allow wholesale electric customers the opportunity to purchase electricity on the open market. This led to a desire for similar access for retail customers. Each state is addressing this issue separetly. In October 1999, Gov. George W. Bush signed Senate Bill7, giving customers of investor-owned utilities i Texas choice in their electricity provider. The Texas Electric Choice Program encourages competition in the electric industry, which means Texas businesses now have the power to choose an elctric provider that best meets their unique energy needs.