Dallas / Fort Worth Local News

by Bennett Cunningham
DALLAS (CBS 11 News) ― Some call it a blessing, others a curse – we're talking about the deregulation of the Texas electricity market.

In 1999, the Texas legislature deregulated the electric market and mandated TXU to offer one standard electric rate, known as the "price to beat." This rate was usually the most expensive. Currently it's 15 cents per kilowatt hour.

The Texas Office of the Public Utility Counsel estimates 1.5 million customers still pay the high rate. TXU says the number of customers is significantly lower but won't disclose the actual number.

On January 1st, the price cap will disappear and no matter your electric provider you may still feel a jolt.

That is what North Texas resident Linda Meek and her husband are afraid of come next year. The couple is already struggling to pay the mortgage at their RV Park, because they say their electric bill is up nearly 70-percent since April 2006.

With the price cap going away, Meek is concerned TXU won't play nice. "I told my husband the other day, 'It's not going to be going postal - it's' going to be going TXU.'"

State representative Lon Burnam wishes he never voted for deregulation. "It's the worst vote I cast."

But Governor Rick Perry says Texans are saving money. "Because of the deregulation, we put into place back in 1999; Texans have saved over 2-billion dollars. If we will allow for the deregulation to go forward competition will drive these rates down."

The Office of the Public Utility Counsel says the rate decreases haven't happened. The office says TXU's 'price to beat' rate is artificially high, and many other electric competitors just follow TXU's pricing lead.

Office of the Public Utility Counsel Spokesperson Tim Morstad points out that since earlier this year, competitors prices are down 3-percent since January. "Competition hasn't forced them to lower prices this year so why would that competition force them to lower prices next year."

Numbers from the U.S. Department of Energy and the Texas Power to Choose website show that since 2002 Texas electric rates are up as much as 99-percent!

According to the latest 2006 stats, on average Texans pay the 11th highest electricity rate in the country and Texans pay 50-percent higher rates than residents in their surrounding states.

The average electric rate nationwide is 10.3 cents and TXU's 'price to beat' rate is up more than 80-percent since 2002.

Joe Sanchez of the Texas Office of American Association of Retired Persons (AARP) says the Texas Public Utility Commission needs to protect those on fixed incomes. "The thought of the 'price to beat' going away in January 2007 is a terrible thought for most of our senior citizens."

A recent AARP report states older Americans are vulnerable to rapid increases in energy prices and that they devote a higher percentage of their spending to energy costs. "We have senior citizens who have to decide whether to buy medication or pay for electricity," Sanchez said.

CBS 11 News traveled from Dallas to Austin after the Chairman of the Public Utility Commission, Paul Hudson, said he would talk with us about electric prices. Hudson abruptly cancelled the interview two hours before and didn't want to answer any questions.

TXU says state oversight will still exist, plus it says it offers rate plans that are significantly lower than the 'price to beat'.

Chris Schien of TXU says, "It's not going to be regulated in the way that the regulator will determine the price you should pay but they will continue to have oversight."

Meek says she still worries. "To wake up at 60-years-old and not have anything. Everything is right here; it will (all) be gone."

Speculation is electricity rates might initially drop but then go up.

TXU is voluntarily holding the 'price to beat' rate at 15 cents per kwh until 2010, but since the rate is not regulated the company could change its mind.

TXU wholesale is currently under investigation by the state for allegedly manipulating the price of electricity in Texas. State Representative Linda Harper-Brown, of Irving, is calling for public hearings on the matter.

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