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Q: What has stayed the same in electric service?
A: Your current Transmission and Distribution Utility, or "local wires company," continues to deliver electricity to your home. Your local wires company still responds to service interruptions and continues to maintain the poles and wires. You will continue to receive the same reliable service you are used to with your local wires company, regardless of which Retail Electric Provider you receive service from.
Q: What has changed in electric service?
A: You can now choose to buy your electricity from a different electric provider than the original provider for your area. These companies are called Retail Electric Providers. Additionally, your bill now looks different than bills you have received in the past, but each Retail Electric Provider provides the same standard information.
Q: Do all Texans have the power to choose their electric provider?
A: No. City-owned utilities and member-owned electric cooperatives have the option of giving their customers a choice of providers, or keeping things the way they are today. To see if competition is active in your area, enter your five-digit ZIP code in the box at the top of this page, or call toll-free 1-866-PWR-4-TEX (1-866-797-4839).
Q: What are the benefits of Electric Choice?
A: Texas’ electric rates are average, compared to the rest of the country, but our usage is among the highest in the nation due to demand for air conditioning during the long, hot summer season. Competition in other industries has often brought lower prices and innovative, new products and services. Having more control over your buying decision should make it easier to determine what matters most to you, whether it’s prices, renewable energy, customer service, or simply a name you know.
Electric competition also should help the environment because Retail Electric Providers must offer some energy from renewable energy sources. Renewable energy – such as wind, solar, hydroelectric and biomass (gas released from landfills) – produce less air pollution than sources that rely on burning coal or natural gas.
The Texas power market is one of the most attractive in the country for new investment. Forty-seven new power plants have been built or are being built in Texas since 1995 (that’s almost one-fourth of all power plants being built or planned in the nation). The properties represent a $10 billion investment in Texas. These plants provide jobs and sales and tax revenue into local Texas communities.
Q: How does Electric Choice affect electric rates?
A: The base rates for residential and small commercial customers of investor-owned utilities in Texas were frozen from September 1, 1999, to December 31, 2002. On January 1, 2002, rates for most of these customers were lowered, creating the "Price to Beat." The Affiliate Retail Electric Provider cannot charge above this rate until it loses 40 percent of its customers or five years pass, whichever comes first.
Q: If electric rates are frozen, why does my electric bill rise?
A: Texas law allows the Affiliate Retail Electric Provider (the electric provider that was part of the original electric company that generated and sold electricity in your area, that now only sells electricity) to ask the PUC to adjust the "fuel factor" portion of its rate when there are significant changes in the market price of natural gas and purchased energy. These requests, which may be made twice a year, are subject to PUC review and approval. The cost of natural gas has increased significantly over the last year, and fuel factors have been increased to reflect the higher cost of natural gas. For more information on how natural gas prices change please review Questions and Answers Regarding Natural Gas Prices.
The Affiliate Retail Electric Provider is prohibited from making a profit on fuel costs. Competitive (or new to the area) Retail Electric Providers set their own electric service rates.
Q: With competition, will the reliability of my electric service change?
A: No. No matter which Retail Electric Provider you choose, your electricity will continue to be delivered safely and reliably by the local wires company, a company still regulated by the PUC.
Q: How does the new competition law protect the environment?
A: The law requires "grandfathered" power plants (those that predate the 1971 Texas Clean Air Act) to reduce nitrogen-oxide emissions by at least 50 percent and sulfur dioxide by 25 percent before May 1, 2003.
- Encourages upgrade or retirement of older power plants to meet emissions standards by allowing utilities to recoup the costs of retrofitting or retiring certain older power plants.
- Provides incentives for energy efficiency programs that will result in less demand for the production of electricity.
- Requires retail electric providers to buy an additional combined 2,000 megawatts of Texas renewable electric generation capacity statewide by January 2009, from sources that include wind, solar, hydroelectric, biomass or geothermal.
Q: Do I have to switch from my current electric utility?
A: No. If you decide not to choose a new Retail Electric Provider, your service will be provided by the Affiliate Retail Electric Provider. The Affiliate Retail Electric Provider is the electric provider that was part of the original electric company that generated and sold electricity in your area, that now only sells electricity and provides customer service.
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