Cement company first and only to file as Texas electricity retailer

A cement and steel company is the first and�so far�the only company to file an application to become an electricity retailer in Texas. September 1 was the first day companies could register interest in selling power under the state restructuring law and no other companies have filed yet, according to records at the Public Utility Commission of Texas. Commission Chairman Pat Wood has said he expected at least 27 to 30 applicants once filing was allowed.


Ann de Rouffignac
OGJOnline

A cement and steel company is the first and�so far�the only company to file an application to become an electricity retailer in Texas. September 1 was the first day companies could register interest in selling power under the state restructuring law. No other companies have filed yet, according to records at the Public Utility Commission of Texas.

Commission Chairman Pat Wood has said he expected at least 27 to 30 applicants once filing was allowed.

Industry sources say big retail players haven�t filed yet because they are intervening in so many cases at the commission there has not been the time to do the paperwork. And some players are waiting for clarification from the commission concerning the financial assurance required, sources say.

If approved by the PUC, TXI Power Co., a unit of Texas Industries Inc., (TXI) will be able to negotiate directly with generators in 2002 when competition begins to get the best deal for power. The big steel and cement producer uses about 260 Mw of electricity in its two steel plants located adjacent to one another in TXU Corp.'s service territory in north Texas.

Under the current regulated utility system, TXI is on a special instantaneous interruptible tariff. This means if voltage falls below a certain threshold, TXI is automatically pulled off the system. The special rate means that no request is required to get them off line in times of a crisis.

�All of the instantaneous tariffs will go away with deregulation,� says Mark Smith, attorney with Casey Gentz & Sifuentes LLP in Austin.

TXI decided to pursue being a retail electric provider in Texas in order to find supply for its own plants and cut out the middleman or other retail electric providers. End use customers like TXI are not allowed to contract directly with generators for electricity under the new deregulation laws, says Smith.

Smith surmises that other industrials with large but variable electricity requirements will want to file to serve their own load as well.

�This (the filing) gives us flexibility to look at a number of ways to get power,� says Randy Jones, vice-president corporate communications and government affairs at TXI. �We may or may not ever use it.�

TXI could still remain TXU�s customer once competition opens up in Texas. TXI has the largest single electrical load in one location on TXU�s system, Jones says.

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