Texas Electricity News: El Paso Electric To Remain Regulated

Posted on Posted in Texas Electricity News

Even though Texas electricity is widely considered by everyone outside of Texas to be a deregulated market as a whole, not every area of Texas is deregulated. And that’s going to remain changed for the near future. The Texas Legislature recently passed a postponement to the Governor for the transition of El Paso Electric from a regulated utility to a deregulated electricity market. In short, El Paso Electric will remain a market without electric choice for the foreseeable future. Outside of Austin Energy and CPS in San Antonio, and Entergy in Southeast Texas, El Paso Electric is the largest remaining regulated area of Texas. The postponement that was sent to the Governor states that a regulated entity needs the following to become deregulated:

– 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

That being said, it appears that the main reason that El Paso Electric isn’t moving forward into becoming a deregulated electricity market is because they were apparently unable to offer fair competition for residential customers. Which isn’t that uncommon, 80% of Illinois(the Southern Half) is regulated for the very same reason. In short, either they couldn’t offer competitive rates to everyone in the market or they can’t offer consistent and reliable service to everyone in their footprint. Which of those two things it is, or both, isn’t exactly clear. But the point is that this huge bubble of West Texas is going to remain devoid of electricity choice for the foreseeable future.

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 372,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico. Its service territory extends from Hatch, New Mexico to Van Horn, Texas and includes two connections to Juarez, Mexico and the Comisión Federal de Electricidad (CFE), Mexico’s national utility.

2 thoughts on “Texas Electricity News: El Paso Electric To Remain Regulated

  1. (Please confirm) I take it there is no possibility of exporting excess power from self-generation in El Paso?…no wheeling by El Paso Electric to a (non-existant) wholesale or retail market.
    Thanks,
    Ron

    1. Ron,

      I’m not an expert on generation, but I doubt there’s much of an opportunity to export power. For starters, this summer at least, the demand for electricity is so high that there wasn’t any excess power.

      Additionally, regulated or deregulated, all energy essentially comes and goes from the same grid. There is a market for wholesale energy, and companies can sell back their energy to the market, but that’s typically at a loss when a retail electricity provider sells it back. I’m not sure what opportunities exist for wholesale generators. I’m still guessing not much. They’re certainly not pushing out an excess that would make a mint, so to speak, because outside of an emergency like we had this summer, demand is under control 9 months out of the year.

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