By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
The theory behind deregulation is simple. The new companies, known as retail electric providers, or REPs, will now compete against each other to sell you electricity, much the same way grocers compete to sell you pickles. The competition, we are told, will mean lower prices, more variety and better customer service. For the environmentally conscious, deregulation also means a new chance to be "green" by choosing less polluting sources of power.
So, now you have a choice. You can ignore the entire matter and continue getting your electric bills from TXU, or you can go shopping for cheaper energy.
The electricity market may be unfamiliar terrain to most, but the Texas Public Utilities Commission is assuring us that the process of finding a new REP is akin to "shopping" and should be "easy." It says so right there on the agency's Web site, www.puc.state.tx.us, which has been updated to include a guide for those brave enough to make the journey.
To begin, I click on a box on the PUC's homepage: "TEXAS ELECTRIC CHOICE. The power is yours. Use it." Two clicks later, I enter my ZIP code and retrieve a list of nine companies serving Dallas, including TXU. Next, I print their "worksheet," which consists of 11 questions to ask the company representatives.
For starters, What is their price "per kilowatt-hour?" Is that price "fixed," and is a contract required? The price per kilowatt-hour seems understandable--the lower the better. If Tom Thumb, for example, sells potatoes for 38 cents a pound, but Albertson's sells the same potatoes for 30 cents a pound, go to Albertson's.
The first company to call on the list is The New Power Co., and it's a spawn of Enron, one of several energy giants that successfully lobbied Texas legislators for deregulation.
New Power--like many of the other REPs--is essentially a middleman. It buys power from coal and nuclear plants, among other sources, which is sold on the open market, where prices fluctuate. As part of deregulation, TXU, which still controls everybody's meters, is for now required to charge no more than 8.25 cents per kilowatt-hour. That's called the "price to beat." Several years from now, TXU will be free to charge whatever rates it wants under the new law. In the meantime, the price-to-beat clause gives the new companies time to undercut TXU and lure customers.
On the other end of the line, Josh is, like, you know, pretty straightforward. Their rates are 7.1 cents per kilowatt-hour, plus a monthly service charge of $6.99, and the prices don't fluctuate with the market. I assume this means I have to sign a contract, which guarantees that price for a certain amount of time and, in return, requires payment of a cancellation fee if I leave New Power before the contract expires. Josh has news for me.
"We do ask that you stay with us for a year, but I mean there's no cancellation fees," he says. No catch? Josh also says there are no other fees whatsoever, including a "switching" fee. Are there any incentives, particularly environmental ones, that make New Power the best choice? Josh says the company tries to use wind-generated power "as much as we can."
And how much is that?
"We have several different companies we purchase our electricity from, such as Duke Energy, El Paso, and there's some other ones. I can't think of their names, but we buy from, you know, so many companies that, you know, it's not necessarily all the companies use green energy."
"Some of 'em might use nuclear, coal. Stuff like that."
Can you say what percentage of your electricity is green?
"No, ma'am. I can't," he says. "The majority is green energy."
Their real advantage, he says, is their lower price per kilowatt-hour. All I needed to do was ask Ms. Walker at Reliant how much that company charges per kilowatt-hour before I saw that kilowatts are not potatoes.
"It depends on where you're located. Where are you located?"
"Dallas," I say. As I wait for her reply, I hear her flipping through pages of what I presume to be a pitch sheet.
"OK, per kilowatt-hour you have a choice of two different rates. Um, 7.3 cents," she says, stopping to consult her paperwork. "I mean, yeah, 7.3 cents per kilowatt-hour or 8.3 cents. Let me explain the difference."
"It would be 7.3 cents per kilowatt for what's called the reliable rate. And that's just for just regular utility service. The other one, the reason it's a bit higher is 'cause it's the renewable rate, and what that means is that it is for the environmentally conscious customers; it's basically saying that any electricity you use per kilowatt we'll put that back into the electric grate system through the wind plants, which means it, you know, has no emissions in terms of toxic or any kind of, you know, environmental issues."