Texas PUC sets rules for �provider of last resort�

The Public Utility Commission of Texas has adopted rules governing electricity �providers of last resort.� The companies, to be selected by the PUC, will be required to offer electricity to any customer who asks for it, as well as to customers who lose service because their providers went out of business. The rules are intended to guarantee Texas consumers will always have an electric provider when competition begins in 2002.


Ann de Rouffignac
OGJ Online

The Public Utility Commission of Texas adopted rules governing electricity �providers of last resort.� The companies, to be selected by the PUC, will be required to offer electricity to any customer who asks for it as well as to customers who lose service because their providers went out of business.

The rules are intended to guarantee consumers will always have an electric provider when competition begins in Texas in 2002. The commission will call for competitive bids to select the provider of last resort.

The commission expects many bidders to compete on price to become the provider of last resort in a given service territory. Others, however, expect the provider of last resort in a given service territory will most likely be the retail electric services company that once was a part of the large incumbent utility�as has happened in most parts of the country.

�The RFP [request for proposal] will be out soon,� says Commissioner Brett Perlman in an interview. �When the responses come in, we will know if we we�re correct.�

At the worst, if no company bids, the commission has the authority to appoint a company to provide the services.

It is not known what the price would be for electricity in this case, says Perlman.

�We haven�t thought about that yet,� he says. �We hope to have lots of bidders.�

An electric company can own both a competitive retailer and a provider of last resort, according to the new rules. Although the commission has mandated all customer records be kept separate, facilities and employees can be shared.

A provider of last resort cannot give its list of customers to the affiliate electric provider company for marketing purposes, unless the list is provided to all competitive retailers.

The providers of last resort are required to:

� Offer a standard retail service package for each customer class at a fixed nondiscountable rate.

� Respond to customer inquiries and follow applicable customer protection rules.

� Assure continued service.

� Ensure the same benefits are available to low-income customers as other providers make available to more affluent customers.

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