Granted, not all Texans live in areas of the state where choosing an electricity provider is an option, but regardless, understanding the working pieces that drive Texas electricity will make all of us more informed energy consumers.
In addition to operating a consumer information hot line, The PUCT also regulates rates and services of all investor-owned electric and local telephone companies, sets and maintains ongoing standards of service for regulated electric companies, and issues statewide franchises for cable TV and video services.
The PUCT is quite simply a consumer advocate for choice in the Texas electricity market.
The PUCT is primarily responsible for regulating rates and terms of service for both transmission and distribution in Texas’ deregulated areas, oversight of the ERCOT market, managing renewable energy resources and ensuring consumer protections for retail electric service.
Customers call up an REP (EX: Bounce Energy, TXU, Reliant) and place an order for electricity service.
The REP is then responsible for logging that order with the local TDSP (Transmission/Distribution Service Provider). This is done through the neutral third party – ERCOT, ensuring that electricity service will be turned on and ready at the specified date on the order.
The introduction of deregulation and competition paved the way for the TDSP and REPs to each handle different responsibilities, namely the billing and customer service versus the transmission and distribution of electricity.
Texas not only provides a quarter of the nation’s refining capacity with nearly 5 million barrels of oil processed per day, but also accounts for a quarter of total natural gas production as the nation’s leading producer.
Needless to say … there are more than just a few large-scale, essential power generation companies in Texas.
Power generation companies own and operate the power plants responsible for producing energy sold on the wholesale market to Retail Electric Providers in Texas, who of course turn around and package it for the consumer.
There are also dozens of local electricity co-ops that provide service to rural parts of Texas. Many of these co-ops fall under Touchstone Energy, a nationwide alliance of 680 local electricity cooperatives located in 80% of the nation’s counties that serve more than 40 million members.
The Electricity Council of Texas (ERCOT) is a nonprofit corporation entity under NERC/FERC, which manages the flow of electricity and power to over 22 million Texas electricity consumers, a large portion of the State’s deregulated markets.
What Role does ERCOT play in Texas Electricity Market?
ERCOT schedules power to an electric grid that covers over 38,000 miles of Texas Electricity Transmission, equivalent to 85% of the state’s electric load.
Manages 75% of the deregulated electricity market in the state.
Oversees financial settlements for the wholesale bulk-power market in Texas as well as customer switching for more than 6.5 million Texans in deregulated areas.
ERCOT is overseen and regulated by The Public Utility Commission of Texas (PUCT). The PUCT aids ERCOT in performing its role in the Texas electricity market by helping manage the power grid and ensuring that market rules are in place to protect consumers.
Deregulation provides not only unique benefits to the Texas electricity consumer, but also unique structural and logistical needs in order to ensure that electricity service across the state remains safe and reliable.
Moving forward in 2009 and beyond, the continued growth of deregulation in the Texas electricity market only serves to increase competition and foster more opportunity for affordable and reliable electric service.