Consumer and environmental groups backed out of talks last month with
legislators interested in filing a bill calling for deregulation of Texas’
electric industry. Tom “Smitty” Smith of the consumer watchdog group Public
Citizen, who was among the consumer and environmental advocates who walked
away, lists three concerns that he says pro-deregulation forces refused to
adequately address:
* STRANDED COSTS. Naturally, the state’s utilities want those costs covered in
a deregulated environment. But consumer advocates want a more equitable
solution than what is currently available to consumers. “Austin residents pay
40% of their monthly bill toward the STNP,” explains Smith. “We didn’t want
rates to go up for any customer class, but the way things were presented, the
rates would be frozen in allocating those stranded costs in a way that was
unfavorable to residential users, and favorable to business.” For instance, the
majority of expenses incurred to service residents lie in distribution, a
relatively small portion of a utility’s overall investment (21%), while most
expenses incurred servicing larger industrial users lie in costly generation
and transmission (78%). Wouldn’t it be fairer, proposes Smith, to place the
heavier burden of paying stranded costs on those who are benefiting the most
from those investments?
* RENEWABLE ENERGY. Alternative energy sources like wind and solar power are
more expensive to produce than fossil fuel sources currently used to run power
plants, in part because the industry is too small. Studies performed by the
consumer groups show that 70% of Texas residents are willing to pay $1 more per
month to use “green” sources of energy, but the alternative energy industry has
not grown sufficiently to become economically viable. The consumer groups
wanted money allocated from electric bills to assure that enough renewable
energy resources were built in Texas to create a new industry and help defray
the higher cost of renewables today. “The industry representatives were willing
to give us five years of funding, but they were unwilling to go long enough and
put up enough money to make it work,” says Smith.
* ENERGY CONSERVATION. Conservation programs, such as the energy efficient loan
programs and abatements offered by Austin’s municipally owned utility, are
being scaled back across the state as utilities look for ways to trim costs in
a more competitive environment. Without sufficient money for programs to
encourage energy efficiency and conservation, Smith points out, new
multi-family and single-family builders outside city limits have no financial
incentives to go the extra mile for more expensive energy-efficient materials
and appliances. — L.C.B.
This article appears in February 21 • 1997 and February 21 • 1997 (Cover).