AUSTIN -- Cities, counties, and schools across Texas expect to see significant savings on their electric bills this year by banding together to negotiate lower electric rates from competing Retail Electric Providers (REPs).
Under the provisions of a new law that opened the Texas electric market to competition on January 1, electric customers can form groups, or aggregate, to buy power in bulk, often producing considerable savings. Groups of customers can form their own aggregator, or sign on with an aggregator registered with the Public Utility Commission of Texas (PUC).
According to recent new accounts, several electricity-buying groups already have projected big savings for their members. The Public Power Pool, a group of 46 local governments and political subdivisions that includes Dallas, Harris, Tarrant, and Webb counties, as well as the City of Dallas and several school and hospital districts, foresees $36 million in collective savings over the next year.
Likewise, a group organized by the Texas Association of School Boards, consisting of 192 school districts, anticipates slashing more than $15 million as a result of a recently signed contract with TXU.
"This is a great example of how electric competition can benefit Texans in a meaningful way," said Public Utility Commissioner Brett Perlman.
Other examples of projected savings through electricity-buying groups include:
Cities Aggregation Power Project (CAPP), with 71 member-cities, including Arlington, Irving, and Plano, as well as two water districts, signed a contract with First Choice Power, the unregulated affiliate of Texas-New Mexico Power. CAPP projects a combined savings of about $10 million for its members.
The City of Fort Worth estimates it will shave 20 percent off its 2002 electric bill thanks to a new 17-month contract with TXU.
The South Texas Aggregation Project, comprised of a group of 40 cities, including Corpus Christi, Laredo, McAllen, Harlingen, and the Lavaca Navidad River Authority, projects an average 12.6% decrease in electric bills as a result of their contract with First Choice Power.
The Spring and Mesquite school districts foresee more than $1 million in savings each over the next year because of a recently negotiated contract with TXU.
As a new member of the Public Power Pool, Brazoria County expects to save almost $400,000 a year on electric costs
The small, South Texas town of Beeville recently signed an agreement with First Choice Power that should cut nearly $60,000 off the town power bill.
Public entities are not the only electric customers getting in on the savings.
Texas Instruments recently signed a two-year contract with Reliant Resources involving 24 TI facilities in Texas. As a result of the $100 million-plus contract, TI expects to lower its electric bill by about 20%.
Similarly, the Texas Dairy Queen Operators’ Council signed a contract with First Choice Power involving 146 Dairy Queen restaurants. The council said it expects owners of Dairy Queen franchises to see a 25- to 45-percent reduction in their monthly electric bills as a result of the contract.
As of January 1, most customers of investor-owned utilities in Texas have the power to choose a Retail Electric Provider (REP) - the company that provides their electricity. Texans can now shop for electric service, much as they do for other products and services, based on what matters most to them, whether it’s price, customer service, or renewable energy.
Whether customers choose a new REP or decide to remain with an affiliate of their current electric utility, the PUC will continue to ensure the safe and reliable delivery of electric service, and enforce a variety of customer protections.
If you have any questions about electric competition, choosing your electric provider, how aggregators work, or other changes in Texas’ electric market, call the Texas Electric Choice toll-free number at 1-866-PWR-4-TEX (1-866-797-4839) (TTY 1-877-864-4725), or visit www.powertochoose.org.
