Saturday, August 4, 2001

Deregulation jitters jangle Texans' nerves

AUSTIN - Now that state officials have kicked off the electric deregulation pilot program in Texas, they need to spend the next five months aggressively working on their public relations efforts.
   Their challenge is convincing Texans that electric deregulation in the Lone Star State is different than in California.
   Deregulation is supposed to benefit consumers by creating more competition among utility companies and lower prices. But California's energy problems have created uncertainty and concern among Texans, who want assurance their lights will stay on when deregulation takes effect statewide on Jan. 1.
   In a recent Texas Poll, 61 percent of Texans said they were concerned that Texas could face some of the same problems as California.
   The law allows investor-owned electric utilities to market their services and supply power to customers in other cities.
   When Texas lawmakers passed the electric deregulation law in 1999, they wisely included a pilot program to begin six months before full statewide implementation.
   More than 90,000 customers have signed up for the pilot program, according to the Electric Reliability Council of Texas, which operates the state's electrical power grid. But that's only about one-third of those eligible for the test project - a signal that Texans are still skittish.
   Proponents of deregulation in Texas say they are fighting the perception that the Lone Star State will suffer a similar fate as California.
   California's problems stem from its 1996 deregulation law, which lead to a severe power shortage that resulted in rolling blackouts and skyrocketing electric bills.
   California's law did the opposite of what deregulation should accomplish. The purpose of deregulation is to create more competition among electric providers, lower prices and better service for consumers.
   But Texans shouldn't confuse California with Texas. There are many significant differences in the way the two states approached electric deregulation.
   California wasn't prepared for electric deregulation. Texas has done and continues to do extensive preparation. California has a shortage of generation capacity, high natural gas prices and a poorly designed law that forced the state's two largest utilities to pay high wholesale prices for power they sell to consumers at a loss.
   More than 50 new power plants have been built or are being built in Texas since 1995 and another 31 are on the way, according to the Public Utility Commission.
   California has built only two power plants since 1995. Texas gets its power from diverse sources, whereas California relies on hydroelectric power for 25 percent of its electricity needs. In dry conditions, California is susceptible to shortages.
   ''In other parts of the country, there are legitimate causes for concern about the energy infrastructure,'' PUC Commissioner Brett Perlman said. ''But Texas has a strong infrastructure to meet our needs for electricity, even during a hot Texas summer.''
   Many Texans remain edgy
   Nevertheless, many Texans are still uncertain. The possibility that something will go wrong is frightening for many. Texans also need to be assured that their electric bills won't skyrocket.
   The Texas Public Utility Commission has recognized the need to ease the fears of Texans. But officials have a tough selling job ahead.
   The PUC has developed a consumer education program that includes advertising, publications, public relations, community outreach, a toll-free customer help line (1-866-797-4839) and a Web site, www.powertochoose.org.
   The PUC also unveiled in July a new brochure titled, "Texas is Different from California." It points out that, unlike California, Texas has plenty of power reserves, diverse sources of power and a strong infrastructure to support competition.
   Now, the PUC and the utilities need to get their message to as many Texans as possible. Texans who take the time to learn the facts about deregulation will discover that Texas is nothing like California.
   Ty Meighan is chief of the Scripps Howard Austin Bureau and can be reached at 512-334-6640 or
  
  

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Ty Meighan is chief of the Scripps Howard Austin Bureau. You can reach him by phone at (512) 334-6640 or by email at meighant@scripps.com.

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