Electric Deregulation Background
Texas Senate Bill 7, passed in 1999, authorizes competition in the electric industry as of January 1, 2002, beginning with investor-owned electric utilities. This competition will allow customers to choose the company from which they purchase the actual electricity. The electricity will continue to be delivered through the same wires by the same company that currently supplies electricity to customers.
CSU Chooses Not To Deregulate Right Away
Cities with publicly owned municipal electric utilities are allowed to evaluate their position and make a decision to opt-in or delay entering the competitive market. College Station Utilities is a locally owned municipal utility and has decided not to opt in to the program at this time.
Deregulation has not always produced lower rates for utility consumers. California has seen rates rise dramatically for those utilities involved with deregulation in that state. Los Angeles has a city owned electric utility and has maintained some of the lowest rates in California while protecting the electric supply to its customers. College Station Utilities must see proof that restructuring will work for customers in College Station before going to the considerable expense and trouble of changing a system that provides reliable electricity at affordable prices.
The College Station City Council carefully reviewed the City's options regarding the decision. After a examining all relevant factors, the Council concluded that it would be premature to immediately opt-in to competition.
Factors considered in this decision are:
- Deregulation experiences in other states suggest that a level of caution be taken.
- The competitive retail market in Texas, despite all assurances of success, is still a new market for electric competition. It is prudent to wait for further development of this market.
- The opt-in decision is irrevocable. Once a decision to opt-in to competition is made, municipal electric utilities must stay in the competitive market.
- The City currently offers reliable, competitively priced power and services to customers of the electric utility. Future competitiveness is assured by an existing power supply contract for wholesale electricity.
CSU continues to provide reliable electric service and boasts a 99.9% reliability rate…one of the best in the State! We invite you to learn more about electric deregulation in Texas by reading the following fact sheets: Deregulation in TexasDeregulation-Municipal Utilities