Texas Legislature Formally Delays El Paso Electric Transition to Competition

The Texas legislature has enrolled and sent to the governor SB 1910, which postpones the transition to competition at El Paso Electric.

Although the PUCT had previously postponed the transition to retail choice at EPE, SB 1910 establishes a statutory prohibition on moving EPE to competition until five statutory steps are completed. The PUCT retains authority to move EPE to competition without legislative approval, provided that all statutory conditions are met.

The five-step process enumerated in SB 1910 is essentially similar to the process required under SB 547 in the 2009 session which indefinitely delayed competition at SWEPCO.

"The legislature finds that an electric utility subject to this subchapter [EPE] is unable at this time to offer fair competition and reliable service to all retail customer classes in the area served by the utility. As a result, the introduction of retail competition for such an electric utility is delayed until fair competition and reliable service are available to all retail customer classes as determined under this subchapter," SB 1910 says.

Among other things, SB 1910 requires the following before EPE may be transitioned to competition:

- Commencement of a regional transmission organization by the Federal Energy Regulatory Commission for the power region containing EPE

- Development of a balancing energy market, a market for ancillary services, and a market-based congestion management system for the wholesale market in the power region in which the regional transmission organization operates

- Implementation of a seams agreement with adjacent power regions to reduce barriers to entry and facilitate competition

- Certifying a qualified power region, which includes conducting a formal evaluation of wholesale market power in the region, in accordance with PURA 39.152

- Approval of a business separation plan for EPE

- Approval of unbundled transmission and distribution rates for the utility

- Establishment of price-to-beat rates for the utility

- Establishment of a retail choice pilot, and evaluation of its results

- Initiation by the electric utility of a capacity auction in accordance with PURA 39.153