MIDLAND, Texas, June 26, 2003 — Cap Rock Energy Corp. announced that Senate Bill 1280, a bill sponsored by Texas State Senator Troy Fraser and promoted by a small special interest group, was signed into law by Texas Governor Rick Perry on June 22, 2003.
Under the Public Utility Regulatory Act (PURA) Cap Rock Energy Corp. was considered an electric cooperative for purposes of the PURA. The new legislation amends the PURA so that the company will be regulated as an investor owned utility.
The Public Utility Commission of Texas (PUCT) will be charged with the responsibility of developing a procedural schedule and timeline for the company to comply with customer choice and deregulation.
Cap Rock said it feels this new legislation will penalize all of its customers and that it will make it more difficult for other small companies to compete with the large utilities in the future. The company believes the net impact on its financial statements will be minimal because costs will be passed through to customers.
“One of our number one priorities has always been our customers,” states David W. Pruitt, President and CEO of Cap Rock Energy. “We continue to feel that SB 1280 legislation is bad for all of our customers and will cause their rates to increase. … A majority of our service territory is not allowed by Texas law to provide customer choice until at least 2007. SB 1280 could force us to provide customer choice earlier than we might have done had the legislation not passed, and this could cost more money, leading to higher rates for our customers.”
Cap Rock had hoped it could monitor the transition and evolution of customer choice in order to opt in at a point in the cycle that would be advantageous for its customers.
Earlier in June, the PUCT voted to withdraw its previous request for an Attorney General’s opinion on the legality of the company’s “conversion” from an electric cooperative to a shareholder-owned corporation if SB 1280 became law.
“We are pleased with this action,” stated Pruitt. “We hope this will let us concentrate on our business of providing the best electric service possible to our customers.”
Cap Rock Energy provides electric distribution services to over 35,000 meters in 28 counties in Texas. Its corporate office is located in Midland, Texas, with service divisions in Stanton, Colorado City, Brady and Celeste, Texas. The company also provides management services to the Farmersville Municipal Electric System. The company’s predecessor, Cap Rock Electric Cooperative, Inc., was incorporated as an electric cooperative in the State of Texas in 1939.