Another Free Market Failure Accusation About Texas Electricity Deregulation

Clean Coal Power Mike Norman with the Fort Worth Star Telegram hits on the topic of if Texas deregulation is really working. I assume he places blame on deregulation as the reason for the Texas power supply failure because the title of his article states, “The Texas free market for electricity just isn’t cutting it“. Maybe he is just meaning that as good as deregulation is it can’t stop the EPA and other non-governmental organizations from halting all oil based energy production thereby raising consumer costs. Deregulation being a failure is a popular argument because any time prices go up or supply capacity is reached we hear about it from the political side that benefits the most from this view.

Is deregulation to blame for every time something bad happens in the deregulated Texas electricity market? No you can’t always blame it on deregulation but it is a piece of the puzzle so yes it is to blame sometimes. The main problem with deregulation isn’t inefficiencies building electric grid infrastructure and power production as this gets approved by the state and then shutdown by the EPA and federal government, not deregulation. Texas has broken up the generation companies and such away to allow new investors to come in and build power facilities but not many have filled this hole left open for increased competition. I think new investors have not come in because you are talking about investing in and building highly federally regulated things like coal, natural gas, and nuclear power facilities.  What new investors want to do what TXU just got shutdown by the EPA for trying to do? I see problems with how some retail providers try and use tricks to market their electric rates but regarding power supply being built out the bottleneck seems to be in government regulation still being in the mix too much.

Even if the market was regulated again under one monopoly per electric utility area you would just as easily be able to blame brownouts and blackouts on the monopoly regulated electric utilities just like deregulation gets blamed for things now. I don’t think Mike is trying to place all the blame on deregulation but he is pointing out that you will see an electric bill increase regardless of the provider you choose because of some recent failures in the Texas deregulated market. You see you very likely will find more non-negotiable ERCOT related fees on your electric bill eventually because of lack of electric supply available to meet demand but who is really to blame for this?

Mike explains that a free market should work in theory because investors are encouraged to place their money where the highest return will be received and in so doing offer just enough electricity to cover the demand as well as spikes in demand. In a perfect system the investor is rewarded a maximum profit for producing just the right amount of power with very little waste left over.

The problem Mike sees with the current deregulated market in Texas is that power plants break down or have to be shutdown to fix or maintain it resulting in loss of supply. If Murphy’s Law is in effect and a power demand spike occurs around the same time as a maintenance shutdown all of a sudden there is not enough power to go around for everyone.

These imperfections are problems that political powers bring up in order to fault the great electricity deregulation experiment of 2002. Will this blame game reverse deregulation in Texas? I really doubt that deregulation can be reversed anytime soon. There is huge public support for energy choice in Texas. Many people can show you on their electric bills how they have saved money because of deregulation simply from using our Electricity Bid website.

Is Deregulation to Blame for Lack of Sufficient Power Supply in Texas?

The problem we are faced with in regards to electric power supply in Texas for 2012 is unreliable power supply due to not enough power plants in operation. Is deregulation responsible for this lack of power?

No! In fact TXU was approved for and planning to build 11 new coal fired power plants that utilized clean burning technology and significantly reduced pollution from these plants compared to the old mothballed coal plants from the past. The prior mayor of Houston and Democratic nominee for governor of Texas, Bill White complained in 2010 that these plants were unnecessary but now they seem all too necessary. ERCOT predicts very tight power supplies this summer and this has politicians frantic but I’m sitting here wondering why we didn’t just get started on those 11 coal plants in 2010?

I think what Pat said has a lot to do with our problems…..Pat Ennis with Priority Power Management said, “”I’m not the smartest guy around, but I’d be willing to bet that… we’re not going to have any coal plants built here in Texas for a long time — between the EPA and the environmentalists, coal is kind of a no-no.”

The state of Texas has been contending with attacks from the Environmental Defense Fun and the EPA in regards to an argument that is mainly about the states CO2 emission levels. Instead of focusing their argument primarily on pollution like mercury levels and other scientifically verifiable pollutants they were able to stop 11 new coal fired power plants from being built by TXU because of a global warming argument.

Many scientists and climate scientists non-affiliated or backed by the United Nations IPCC organization disagree that global warming has a negative environmental impact or that man has anything to do with it. Over the last decade their has been a decline in average global temperatures and so to even argue CO2 levels to prevent Texas from expanding their power capacity only serves to hurt these environmental activists causes.

What Can Texans Do to Increase Power Supply?

Does anyone remember back a few years ago when TXU proposed building multiple state of the art clean burning coal power plants? These power plants would have significantly updated the power infrastructure in Texas but the plan was shutdown because of environmental nut jobs. Even though the power plants would have been state of the art cheap coal power with significant reductions in pollution compared to current coal power plants in operation the plan did not go through. The state of Texas must fight the EPA and federal government politically where it hurts and take back our state and its ability to provide power to our citizens.

Even with an unsatisfactory amount of power generation plants built in Texas we have seen a steady increase in large commercial and industrial facilities building on-site power grid infrastructure that are little mini power generators for their companies. These miniature power generators also known as distributed generation systems account for a large portion of the overall electricity consumption in Texas. During peak demand periods in the day these generators can turn on resulting in no need for the state to start rolling blackouts in residential neighborhoods.

The Texas demand curtailment program has been a huge success. Companies are paid to enroll in a program that they do not even have to participate in when and if they are asked to turn off their power for maybe only 20 – 30 minutes in the span of 1 month. The program is enrolled to it’s limits each time Texas opens it back up. What does this mean? There are likely more than enough large commercial and industrial facilities that would jump at the chance to shutdown production for a short interval in exchange for being paid by the state of Texas to do so. Consider that many large companies like this shutdown once a month anyway to test their back up generators so why not get paid to do this?

Solar generation at this time is not a good option for solving the states problems but has limited uses.  As we have seen, large federally backed companies like Solyndra have not even been able to stay a float because of the expense it costs to produce cheap affordable power using solar. Hey I am a fan of solar but like most people I can’t afford to build a solar off the grid system on my home or business. If I can’t afford the system like most of us why would you think the federal government can? We are at record breaking tax deficits in the beginning stages of an economic collapse and those tax dollars are to be used for things that are considered affordable and have at least a 10 year return on investment. Wind power is a partial option but is only viable to use in combination with natural gas power generation as it can share in the control systems and connections to the grid.

The smart meters, and energy efficiency programs utilities across the state offer continue to assist in teaching home owners how to make their homes more efficient and lower their monthly energy bill. These programs should continue to be encouraged and promoted through local electric utilities that control the power infrastructure.

Clearview Electric in Danger of Retail Electric Provider Certificate Being Revoked

The Public Utility Commission of Texas has stated in their latest filing that they believe the requirements of a retail electric provider certificate holder are well known and should have been known by Clearview Electric. The commission does not believe a waiver should be given to Clearview Electric in order to allow them to comply with the requirements of being an REP in Texas unless specific circumstances warrant it.

The PUCT has asked that Clearview give them at least 90 days notice prior to the expiration of their suspension period on whether they plan to come into compliance with the PUCT rule P.U.C. Subst R.25.107 by the compliance deadline. So what is this rule all about and how does it relate to the Texas electricity consumer? Below is a summary of the rule that the PUCT is trying to get Clearview Electric to be in compliance with.

The amendment to §25.107 (1) provides requirements for a change in control of a REP, (2) strengthens the reporting and certification requirements related to managerial resources and ability, (3) limits the number of business names (dbas) a REP may operate under, (4) provides requirements for certification as a distributed generation REP serving large commercial customers, (5) allows the commission to draw on a letter of credit upon the revocation of a REP certificate, (6) defines erroneous switch-holds related to deferred payments plans as a significant violation of the commission’s rules, and (7) makes other clarifying changes.

As you can see the rule seems to be related to making it transparent who owns an electric company as well as limiting the amount of names one REP can hold. I would imagine these rules are in place so that an electric provider cannot hide behind many names for the sole purpose of gaming the system and advertising and promoting to customers in a way that could be seen as unethical and bad for the retail electric markets. We are not saying that Clearview Electric has done any of these things as it appears their violation has more to do with the letter of credit rule. The PUCT may not believe this provider will do anything bad but by enforcing these rules they protect the electric consumer from the possibility of something bad happening.

Currently this company is suspended from selling electric service in Texas. I went on their website and they no longer have Texas listed as one of the states they sell electric service in. From what I can find online they only have about 30 electric service customers in Texas. The PUCT wants a $30,000 letter of credit from them to protect the investment in energy of these current customers but will eventually need a $500,000 letter of credit for them to fully comply. Some of the things the PUCT would like Clearview to agree with in writing to avoid revocation of their REP certificate in Texas are listed below:

  • They must agree to revocation if they fail to comply with rule P.U.C. Subst R.25.107 by the deadline date.
  • Must agree to revocation if they significantly violate any additional rules of P.U.C. Subst R.25.107 before the deadline date of compliance.
  • Clearview must agree that its $30,000 standby letter of credit cannot be withdrawn until they file a $500,000 letter of credit to comply with P.U.C. Subst R.25.107(f)(4)(F)
  • Clearview must agree that once revoked or through Clearviews voluntary ceasing of service to Texas customers it must pay their $30,000 letter of credit to the Public Utility Commission of Texas.
  • They must agree to not add any new Texas customers until the conditions of P.U.C. Subst R.25.107 are met.
  • Clearview must agree to give 90 days advanced notice advance of the June 30 2012 deadline if they will be ceasing operations in Texas or providing the letter of credit.

The PUCT believes that if Clearview Electric cannot agree to these requests that the commission should consider revoking the REP’s certificate.

I looked at the information the PUCT had on Clearview Electric and they do not list any DBA’s this company uses or any bizarre change of ownership information. My opinion is that this electric company may have just not had the required $500,000 letter of credit the PUCT requires for them to operate as a retail electric provider in Texas.

If this is the case it makes sense for the PUCT to be heavy handed in this regard because many electric providers have gone out of business and did not have the money to cover the investment in the energy they purchased when the market moved against them.

The $500,000 letter of credit helps protect customers, investors, and the tax payers from a provider buying energy and then never paying the ERCOT electric grid back for that purchased power.

 

Houston electricity rate plans offer flexibility to the energy consumer

In Houston Texas electricity service customers are beginning to see that choosing a variable electric rate plan and waiting for it to eventually go up is not the best choice.

The wait and see game works for awhile but eventually you can get stung as did Steve Smith who remodeled my house not but a few months ago.

We needed some drywall hung in the living room and some electrical rewiring done and me and Steve started talking. He mentioned that he used to get on a the cheapest variable electricity rate in Houston and wait and see.

If his rate started to go up to high he would simply shop around again and choose the next best offer out there at the time. He did this until one month electricity rates in Houston were sky high.

He could not find a good low priced variable electricity rate plan or fixed plan for that matter. He started to see how doing the wait and see game may work for a little while but you will eventually get burned.

He went ahead and bit the bullet and signed up for 6 months at a pretty high price for that time in Houston Texas. Fortunately after 6 months rates came back down to normal price levels.

He now is on a fixed electricity rate in Houston Texas and enjoys the price assurance a fixed rate offers and the time saved not having to continuously shop for Houston electricity companies every few months.

Steve is now out of the home remodelling business and has started a small sub sandwhich shop in the East Texas area. He used ElectricityBid to procure his commercial electricity rate and we look forward to working with him in the future when his contract comes up for renewal.

If you need to shop for commercial or residential electricity in Houston TX please use the compare tool at the top right by entering in your zip code. You can compare multiple Houston TX electricity companies and find the rate plan that makes the most sense for your situation.

Deregulation Gives Freedom of Choice to McAllen, Texas

Before 2002, Texas electricity was regulated. This meant that your McAllen, Texas service provider was determined by your location. You had no choice in who provided your electricity. You had no choice in what rates you paid. If you wanted electricity in McAllen, Texas, you had to accept the area provider, no exceptions. All of this changed when Texas electricity became deregulated. Deregulation gave the power of choice back to Texas residents, where it belonged.

Deregulation lets people choose who provides their electric service. Just as you get to choose whom you buy your telephone service from, you can choose who powers your home. No longer are McAllen, Texas residents stuck with one rate. You can choose any area provider and since the providers compete for your business, you can choose a low rate.

Our comparison chart makes it easy to make the switch. With our chart, you can compare the electric rates of providers in the McAllen, Texas area. You can quickly see who has the lowest rate. You can see where you current provider stands in the price of their electricity. You are under no obligation to switch providers – our comparison chart is simply a tool to provide you with useful information.

The choice is yours. You have the freedom to choose your McAllen, Texas electric provider. You have the power to save money on your electric bill. Use our comparison chart and see for yourself just how much money you can save. It only takes a few seconds and it costs nothing to compare electric rates.

Lubbock, Texas Electricity Companies, Rate Plans, and Energy Conservation

Lubbock TX electricity companiesToday is an age of “living green”. Everyone is encouraged to do his or her part to save the environment. Residents of Lubbock, Texas need to make sure they do their part, too. One way to “live green” is to conserve energy by changing your consumption of electricity. In some countries, citizens are forced to conserve energy. There are even some places where the government dictates when people can take hot showers! In the land of the free, residents of Lubbock, Texas make their own choice about energy conservation.

If you want to do your part for the environment, there are various ways to save energy. One of the easiest ways is to turn off the lights. Often, people have several lights on in their homes, even in unoccupied rooms. By turning of lights that are not being used, you can save much-needed energy. Watering your lawn in the morning or evening is another way to save water and energy. The cooler morning and evening temperatures prevent the water from evaporating quickly, allowing your lawn to absorb more moisture.

Conserving energy leads to lower electric bills. In Lubbock County Texas there is no choice to choose a competitive electricity company as this area of Texas did not opt into electricity deregulation.

If you want to choose an alternate electricity supplier other than South Plains Electric Cooperative you unfortunately have no choice.

For new service or to inquire about an existing account, call (806) 775-7766

Global Warming Legislation may raise your Lubbock Texas electric rates

South Plains Electric Coop has taken steps to ask the EPA and federal government to pause their request for electric coops in Texas to meet global warming regulations involving emissions standards and retrofits on power plants, and transmission facilities.

Because electric coops serve a small amount of customers in their specific location they do not have the funds to adhere to expensive government regulations. When EPA regulations require your Lubbock electric coop to fix global warming they are asking the coop to spend millions of dollars to fix something that is still up for debate as to whether it even exists.

A recent news story admits that the research and numbers that produced the research article on global warming done by Al Gore and top scientists that led to his Nobel Peace Prize was way of the mark in regards to the factual data and numbers.

This recent discovery regarding Global Warming muddies the water even further on whether electric coops in Texas really need to spend this kind of money to control CO2 emissions into the air.

If TX electric coops do have to make these CO2 emissions changes it will drastically raise coop electricity rates that do not have the same economies of scale as do TXU Energy and Reliant Energy that have several million customers.

South Plains Electric Cooperative is joining with electric co-ops nationally to ask Congress for a much-needed timeout—a two-year moratorium on EPA regulations of carbon dioxide emissions. The agency’s regulation of power plant emissions under a law never intended for that purpose will certainly add costs to electricity generation and drive your bills higher.

A delay would give Congress the opportunity to fashion climate change legislation that protects you, our members, and keeps electric bills affordable. You can help by contacting your elected representatives in Washington and letting them know the importance of this issue.

Electricity Bid helps you find an electric rate and provider to save you money and keep life simple.

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