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Heights backs electric market changes

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Posted: Sunday, March 14, 2010 12:00 pm | Updated: 9:18 am, Thu Aug 16, 2012.

By Mason W. Canales

Killeen Daily Herald

HARKER HEIGHTS – The city is backing a push for changes to the Public Utility Commission and the Electric Reliability Council of Texas that will hopefully create a more competitive electric market.

On Tuesday, the Harker Heights City Council approved a resolution from the Cities Aggregation Power Project Inc., an organization with 102 political subdivisions, to submit several recommended changes for the PUC and ERCOT to the Sunset Advisory Commission.

"(CAPP) just wants to be able to show the cities, which are members of CAPP, are supporting CAPP's efforts in making these legislative changes that benefit the cities' residents and consumers through making the prices more competitive," the Finance Director Alberta Barrett said Thursday.

Some of the proposed changes for the PUC and ERCOT in the resolution include:

The statutory purpose of the PUC should be modified to require it to harmonize its pursuit of competition with the protection of consumers of electricity.

Entities such as municipalities, commercial consumers or retail electric providers harmed by wholesale market abuse should be given explicit standing to participate in market power abuse enforcement actions brought by the PUC.

The number of consumers representatives on the ERCOT board should be increase from the current three to six.

"(CAPP) believes these will go to making the market more competitive and making the PUC more effective," said Geoffrey Gay, a CAPP attorney, Thursday. "We want the (PUC's) commissioners to have a preliminary focus on protecting the rate payers instead of a primary focus on pushing a deregulation agenda."

CAPP does not believe the electric market in Texas is competitive and that PUC's mission has not worked as it was supposed to work, Gay said.

Deregulation raising rates

Since the deregulation of the electric market, consumers are paying 30 percent higher rates than the national average rate, information from CAPP states. Before deregulation, Texas residential consumers were paying lower than the national average.

The prices are not associated with the cost of production, but rather seem very dependent on the cost of natural gas, Gay said.

It is part of the Sunset Advisory Commission's duty to obtain opinions about state boards from those organizations and the public who are provided services by the boards, Sunset Advisory Commission Interim Director Ken Levine said.

"Public input has been one of the pillars of sunset review since it was passed," Levine said.

The Sunset Advisory Commission asked CAPP, as well as the Southern Texas Aggregation Power Project Inc., and the Steering Committee of Cities Served by Oncor, for their input in a questionnaire, Gay said. The organizations, all represented by Gay, returned the questionaire and will be attaching the resolutions from the cities later.

Harker Heights' resolution is one of the first to be returned, Gay said.

"We expect by the time the (sunset) committee sits down in mid-May we will have about 100," Gay said.

The Sunset Advisory Commission uses the all the information collected from people to help direct future policy, Levine said. He couldn't say, however, if CAPP suggestions would make it into a bill for the PUC or ERCOT.

"Many groups and agencies have been quite effective having issues addressed in the sunset process," Levine said. "We are encouraging people to give us their ideas."

Several steps

There are several steps to the sunset process, and one of them is drafting a bill for the legislative process, Levine said. There are public hearings for the reviewed boards, and then the commission will make its final decision. The public hearing for PUC and ERCOT will take place on May 25 or 26 and the final decision will be made July 6.

After the decision, a bill will be drafted and introduced to the state Legislature in 2011.

CAPP believes the opportunity for changes to the PUC and ERCOT is during the sunset process, but it will probably seek out a state representative to work on legislation, Gay said.

"We hope that we can influence that bill as it gets filed in January," Gay said. "Then we will see what additional changes need to be made (and) we will find representative to help us with that process."

Harker Heights has been a member of CAPP for about eight years, Barrett said. CAPP has been successful obtaining lowering suggested rate changes made in the electric market.

Over the years, CAPP has probably saved consumers as a whole millions of dollars, Barrett said.

Contact Mason W. Canales at mcanales@kdhnews.com or (254) 501-7554. Follow him on Twitter at KDHheights.

To read the entire resolution passed by Harker Heights go to: www.kdhnews.com/news/f/resolution_201006.pdf

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