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Friday, February 21, 1997

State lawmakers propose 15 percent electric rate cut

By JUAN B. ELIZONDO Jr. Associated Press Writer

AUSTIN (AP) - Electric companies would have to compete for the right to power Texans' homes and businesses and the companies that serve most Texans now would have to cut rates by 15 percent under bills introduced in the Legislature Thursday.

Rep. Mark Stiles, D-Beaumont, and Sen. Jerry Patterson, R-Pasadena, said now is the time to deregulate the state's electricity market. Both lawmakers said electricity can be sold cheaper in Texas and any deregulation plan should start with a rate cut.

"They are over earning," Stiles said of investor-owned utility companies, like Houston Lighting and Power. "This is something Texas needs."

Under the plan, investor-owned utility companies, which cover about 90 percent of Texas, would have to cut prices by 15 percent starting Sept. 1. Publicly owned utilities, like the city of Austin's, and cooperative utility companies would not have to cut rates.

A spokesman for the state's largest utility companies called the rate cut a gimmick.

Gary Rasp, a spokesman for the Association of Electricity Companies of Texas, said the identical bills filed by Stiles and Patterson would allow companies affected by the rate cut to appeal to the Texas Public Utility Commission if the cut would affect their ability to stay in business. He said that would result in many appeals.

"It's an effort to gain support," Rasp said.

Investor-owned utility companies have argued for months that electricity rates in Texas are below the national average. They say Texas doesn't need to deregulate the market.

Under the current, regulated system, Texas utility companies hold monopolies in the territories they serve.

Patterson said he isn't interested in how Texas rates compare to other states.

"Can they be lower?" he asked.

"We know electricity can be cheaper," Stiles replied.

Stiles added that many of the companies arguing against deregulating the industry are giving cost breaks to large companies. He said if it's OK to cut rates for big business, it should be OK to do the same for small businesses and consumers.

Rasp said large companies can get lower rates because they use a lot of electricity. "That happens in any industry because of economies of scale," he said.

Meanwhile, Karl Rabago, a former PUC commissioner and energy program manager for the Environmental Defense Fund, said his group supports the ideas in the Stiles-Patterson bills. But he said they don't enough for the environment or Texas consumers.

EDF and other environmental groups earlier this year walked away from negotiations on language in the bills. According to Stiles and Patterson, representatives from the electric utility companies refused to be part of the talks.

"The question is are the environment or consumers better off," Rabago said. "I'm afraid the answer is no."

Rabago said EDF will try to help improve the plan.

Curtis Seidlits, head of the electric utilities association, said the bills are nearly identical to proposals outlined by business groups that want the electricity industry deregulated.

"It's written all in their favor," he said of large companies. He added that the utilities never refused to talk to Stiles or Patterson.

"We wanted to talk about whether this was good public policy," he said. "They didn't want to have that discussion."

Leslie Kjellstrand, a spokeswoman for the PUC, said the agency already has recommended deregulation not begin before the year 2000. She said the agency will give lawmakers whatever information they need and will follow their direction.

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The electric deregulation bills are SB684 and HB1509. Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
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