Energy firm's plan may lead to higher rates [TEXAS]

Star-Telegram ^ | Jan. 23, 2007 | R.A. DYER

[Dubya]

AUSTIN -- Just months after lawmakers failed to pass legislation that they said would protect electric consumers, Texas regulators are poised to take separate action that could end up raising home rates.

That's the word from a group of cities and electric cooperatives that say a plan by Entergy, an East Texas electric company, to connect to the state's main power grid could cost consumers an extra $1 billion.

That could mean higher prices for ratepayers everywhere in Texas -- including those in Tarrant County.

The Texas Public Utility Commission is expected to consider the proposal beginning Wednesday and could make a final decision within a few months.

"We think the facts speak for themselves -- if you take an objective look at this, you understand that this is not a very good idea for anybody except Entergy," said Nelson Nease, an attorney for a coalition of East Texas electric cooperatives that opposes the move.

Stabilizing the system

But Entergy says the plan will help improve the reliability of electric delivery for Texans in its Southeast Texas service territory and doesn't represent such a pricey investment considering the long-term benefits.

"It has a big price tab and all that, but ... you can make the case that it makes sense even for customers in Fort Worth and Dallas ... in the long run to make their source of electricity more stable," Entergy spokesman David Caplan said.

[Dubya]

All parties agree that that will more than likely lead to higher prices for Entergy customers who now pay about 11 cents per kilowatt hour, much less than most North Texas customers.

Electric rates in Texas were among the nation's lowest -- about 9 cents per kilowatt hour -- before lawmakers deregulated the retail electric market.

Now Texans pay some of the nation's highest rates, 12 to 16 cents per kilowatt hour. That reversal led to this year's unsuccessful efforts by the Legislature to overhaul the electric market.

[texas booster]

Complex questions why the markets have increased in price so much.

The number 1 reason for the rise in RETAIL electric rates is the increase in cost of natural gas. The PUC in Texas pegged the cost of electricity to the cost of natural gas, even though NG makes up about 25% of the Texas grid.

The excuse was that NG makes up 80% of peak power energy.

In any case, that one rule has increased our rates and bumped up the profits of TXU and Reliant. If you noticed that the PUC and ERCOT are made up of mostly ex-TXU and ex-Reliant executives, you go to the head of the class.

Just wait until Texas gets nodal energy pricing instead of the zonal pricing we now enjoy.