Electrical Deregulation - Planning for Success in Texas Schools

Abstract

Beginning January 1, 2002, Texas' electric industry is opening to customer choice, giving consumers the power to choose the company that provides their electricity. Under electrical deregulation in Texas, there are three separate players. The Retail Electric Provider (REP) markets power to the consumer (public) and serves as the customer point of contact. The Power Generation Company generates the electricity and is already deregulated. The transmission and distribution utilities (wires) remain regulated by the Public Utility Commission of Texas (PUCT). As of the writing of this abstract in October 2001, REP's indicate that only about 15% of Texas ISD's have taken any action. Ready or not pricing and purchasing methods of electricity in Texas will change. This paper discusses major deregulation issues in Texas Schools (e.g. procurement process, contracts, workloads, uncertainty. etc.). The before and after scenarios of deregulation are compared. Texas Schools, to be prepared for success, need to understand their energy usage and patterns, district characteristics, deregulation options and pricing, and terms/conditions. This paper provides Texas Schools with specific homework, electrical deregulation options, procurement process, and RFP guidelines. Owning the fine print is as essential as terms and conditions and may be as important as the price. Examples will be included. The decision making process for all size school districts will be discussed. The experience of the authors in assisting Texas school districts in this process will be shared. After deregulation, homework will also be addressed.