From the Office of State Senator Troy Fraser

For Immediate Release
January 21, 1999
Contact: William A. Scott - (512) 463-0124


AUSTIN -- State Senator Troy Fraser, R-Horseshoe Bay, joined four other Senators today as the primary architects of a bill that will guarantee lowering Texas electric rates by at least 5 percent when market competition among electric providers begins in 2002.

The legislation, introduced as Senate Bill 7, is designed to deregulate the generation of electricity, but the transmission and distribution components of electricity will remain regulated by the Texas Public Utility Commission.

Fraser said he was satisfied that all consumers in non-urban areas will be treated fairly, and he noted that the legislation specifically addresses the concerns of rural electric cooperatives and municipally-owned electric providers.

"Our goal to put in place a framework that will benefit all consumers of electricity in Texas by creating a competitive market," Fraser said.

"My chief concern over the past year was to make sure the rural and non-urban areas will continue to have reliable service and receive the same benefits, in the form of lower rates, as urban areas," Fraser said. "I'm confident that our bill does that."

Fraser noted that Senate District 24 comprises 20 of the state's 83 electric cooperatives, or roughly a quarter of all cooperatives in Texas. The district also includes nine municipally-owned electric providers.

The bill was immediately endorsed by Mike Williams, the president and chief executive officer of the Texas Electric Cooperatives. Under the bill, electric co-ops and municipally owned providers are given the opportunity to decide whether to open their markets to competition.

"This is local control at its best," Fraser said. "Having the support of the rural cooperatives is essential to getting the bill passed. It was also paramount that we wrote a bill that ensured that farmers and ranchers and other rural Texans receive the same treatment as people living in Dallas or Houston."

The bill calls for electric rates to be frozen, effective September 1, 1999 for the more than 70 percent of the state's 8.6 million electric customers whose electricity is provided by an investor-owned utility. Those customers will see a rate reduction of 5 percent in 2002, even if they do not switch providers.

Rates will be frozen at that level for five years or until 40 percent of the electricity in that market is provided by at least one other company.

While the rate cuts are not mandated for customers whose electricity is provided by municipally-owned systems or electric cooperatives, those providers will be free to make choices that give their customers the lowest possible rates, Fraser said.

"Co-ops are free to opt in to the deregulated market by a vote of their governing board," Fraser said.

Other co-authors of the bill, all members of the Senate's Interim Committee on Electric Utility Restructuring , are Sens. David Sibley, R-Waco; Ken Armbrister, D-Victoria; Jane Nelson, R-Flower Mound; and David Cain, D-Dallas.