Think tank rates Texas’ electric restructuring plan among best in nation

AUSTIN, Texas, Aug. 28, 2001 — Texas ranks second only to Pennsylvania in its approach to electric restructuring, according to the Center for the Advancement of Energy Markets’ (CAEM) biannual industry report card.

CAEM’s Retail Energy Deregulation (RED) Index objectively ranks states by 22 attributes on how they plan to restructure their power markets.

“Texas is primed for a successful transition to a competitive electric retail market,” said CEO Ken Malloy of CAEM. “It’s now clearly the state to watch.”

Malloy also praised Texas’ “dress rehearsal” to work out any market-changeover issues, as well as its unique policy for uniformly providing information to consumers through “Electricity Facts Labels.”

“Texas earned this leadership position in the nation’s electricity deregulation landscape,” Malloy added.

According to CAEM, Texas received a high ranking for several reasons:

* As of last June, Texas was the only state to have adopted the consensus uniform business practices and uniform electronic data information protocols. Because disparate rules are significant barriers to market entrants, uniform practices are integral to overcoming these disparities.

* Texas law requires fully separating utilities from their affiliated marketers with established codes of conduct. In addition, all suppliers are required to present certain information uniformly to consumers such as with the “Electricity Facts Label.”

* A significant number of users are eligible to participate in Texas’ pilot program before all customers in participating service territories are eligible for electric choice under the full rollout starting next January.

The study also notes that Texas could set the standard for other states to follow as they prepare for a competitive electric retail market. Each state in the study is ranked on its potential for complete and effective implementation of certain measures necessary for effective customer choice. Texas is currently one of 24 states to implement electric restructuring and open its retail electric market to competition.

“Texas continues to receive recognition for establishing a path to a healthy competitive marketplace,” said Commissioner Brett Perlman of the Public Utility Commission of Texas (PUC). “We are proud that Texas Electric Choice can serve as a model for other states, and that our Electricity Facts Label has been identified as unique and instrumental to a successful market opening.”

How it Works in Texas

Texas’ electric restructuring law includes many provisions to ensure that electric customers and suppliers benefit from Texas Electric Choice. For instance, Texas is currently conducting a Pilot Program that serves as a test-run for Electric Choice to address any issues that arise before full-scale competition begins in January 2002.

Electric Choice enables customers to choose a Retail Electric Provider (REP) based on what matters most to them – whether that is to save money, support environmentally friendly sources of generation, better customer service, or a brand name they know and trust. Over time, competition should lead to lower prices and help speed the development of new products and services as it has in other deregulated industries. Other benefits include the construction of new, cleaner power plants and increased development of renewable energy sources, such as wind and solar energy.

More about the Center for the Advancement of Energy Markets (CAEM) and its RED Index Report can be found at www.caem.org.

For more information about Texas Electric Choice, visit www.powertochoose.org.

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