Top Texas regulator touts technology

With electricity competition scheduled to begin in 2002, the chairman of the Public Utility Commission of Texas says he is not completely convinced lower prices or improved customer service will be the result. But Pat Wood III says the exercise will have been worth the trouble because of technological innovation deregulation has engendered.


Ann de Rouffignac
OGJ Online

AUSTIN�With electricity competition scheduled to begin in 2002, the chairman of the Public Utility Commission of Texas says he is not completely convinced lower prices or improved customer service will be the result. But Pat Wood III says the exercise will have been worth the trouble because of technological innovation deregulation has engendered.

�Even if we don�t get better customer service or lower prices, I would still want deregulation because of technological innovation that will transform the industry,� he said, speaking at the Gulf Coast Power Association fall conference here.

While many issues remain to be resolved in the initial stages of deregulation, new ones are emerging that have the chairman�s attention. Wood identified some of the emerging issues as being:

� Continued investment in generation.

Incentives to increase electric generating capacity "worked,� he said. Wood said he prefers a capacity reserve factor of 15% more than peak load to avoid being in the same situation as California. Conditions must be right for the market to continue to be attractive to new investment, he said.

� Diversity of fuel.

�While we won�t see another nuclear plant, I would like to see a future for coal, he said.�

� Sufficiency of natural gas supply.

Wood said he recognizes that it is a big issue to get gas from the well to the burner tip.

�We need to wake up and see that natural gas is not a bottomless pit. We must go out and look for more of it,� he said.

� Uniform commercial rules.

Texas is working on standardizing rules for transactions across the state. If Texas adopts uniform rules, it will be one of only two states to have done so. Wood said he would like to see standardized rules adopted nationwide so a single retailer could serve customers coast to coast.

� Customer education and protection

Customers can�t have too much information or be educated enough on the new market, Wood emphasized. Licensing electricity retailers is a good way to protect customers from predator companies, he said.

� One transmission company.

Wood said he wonders why Texas will need 32 different electric transmission service providers since the service will continue to be regulated, unlike electric generation. He asked why one big stand-alone wires company wouldn't be sufficient since there would be efficiencies from such a consolidation.

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