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February 7, 2007 (512) 463-0300

FRASER FILES LEGISLATION TO INCREASE COMPETITION IN RESIDENTIAL ENERGY MARKET

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Business and Commerce Committee Chair Senator Troy Fraser lays out his plan to encourage competition in Texas' residential energy market. Senator Chris Harris (left) and Rep. Sylvester Turner stand behind him.

(AUSTIN) -- Citing continued high residential electric bills despite the lower cost of natural gas, Senator Troy Fraser today introduced four bills to increase competition and lower the cost of residential electricity. Following deregulation of the energy market in Texas in 1999, Fraser said, energy costs in the industrial and commercial markets have gone down as providers compete for customers, but rates in the residential market have remained high. The four bills filed today will encourage energy providers to compete, and that should result in lower prices for consumers, he said. "We want you competing in the retail market, we want consumers to have choices, we want prices to come down."

The first bill, Senate Bill 482, would expand the powers of the Public Utilities Commission (PUC) to encourage competition, permitting the PUC to release customer information of customers of non-competitive companies to competitive providers. It would give the PUC power to require affiliated energy providers to send their customers on a month-to-month plan a ballot giving them the option to choose service from a competitive provider, or even allow the PUC to transfer service of month-to-month customers from an affiliated to a competitive energy provider. It would also allow the PUC to study the reasonableness of residential electricity rates, and to make changes to rates to ensure reasonableness.

Another component of SB 482 is a program to increase customer awareness of other providers that may provide cheaper electricity. A big part of a successful competitive market, said Fraser, is customers informed about their choices. "If there's a cheaper price, we want them to know about it. We're going to do public service announcements, we going to do stuffers in bills; we're going to do ads in the newspapers. We're going to make sure that customers in Texas realize there are good competitive prices, and the reliability of service will be there. We're going to make the competitive model work", he said.

Senate Bill 483 would restrict the amount of electric capacity a utility company can generate within Texas, or a zonal boundary or market at 20 percent. SB 484 would direct the Electric Utility Restructure Legislative Oversight Committee to study emerging energy generation technology, and SB 485 would create a system benefit fund to help low-income customers pay for electric service.

Representative Phil King, who chairs the House Regulated Industries Committee, says the current competitive market in Texas works, as seen in the industrial or commercial markets, but that the residential market hasn't developed as fast as expected. He will carry these bills in the House, and he said he hopes these steps will help to drive down electric bills and develop a true competitive residential retail market. "I think the steps that we are taking today, although some of them are large steps, their purpose isn't to change the competitive model, but the purpose is to accelerate its maturing, to where it brings in the competition state wide, that ultimately will provide those lower prices, improve innovation, and provide better service to the customer," said King. The Senate will reconvene Monday, February 12, at 1:30 p.m.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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