07-G Senate Bill 7 - Laserfiche WebLink

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Even after service has been installed, the City of Pads reports that it is now impossible to match up accounts with previous year billings. In years past, Pads' street lighting bill detailed the specific number and type of street lights being billed. Under deregulation, the City's bill simply states "street lights" with no explanation as to which lights are being billed. · As of December 2002, approximately one-fifth of the City of Duncanville's street lighting accounts have not been switched. · The City of Piano has experienced difficulty in preparing budgets for new City projects that require street lighting because of Oncor's new street lighting policies. Instead of a standard street lighting charge like it had prior to deregulation, Oncor now provides a $1,000 credit for each street light and bills the city for any labor and equipment costs exceeding the credited mount. Not only has the change made it difficult for budgeting purposes, it has also resulted in unexpected charges of more than $10,000 or more per installed light. Costs to Customers Increase And Will Likely Continue To Climb Under Deregulation. Why Are Costs Increasing? Deregulation in Texas was premised upon the assumption, albeit false, that historically low and stable natural gas prices would continue to result in the generation of low-cost electricity that would become the market price. To a certain extent, the price of natural gas does set the market price of electricity in the deregulated market, but that price has been anything but low and stable during the last two years. Within the last year, the price of natural gas has been three times what it was when SB7 was passed. Ironically, much of the increase in the price of natural gas can be attributed to a national trend toward electric deregulation that has stimulated an enormous demand for natural gas as new combustion turbine generators have been planned and constructed. It is a fundamental tenet of economic theory that when demand exceeds supply, prices will rise. As gas prices rise to address the increased demand of new electricity generators, the impact is being felt by Texas customers. Everyone is wary of repeating California's failed experiment with competition that brought only high prices and large debts. The Public Utility Commission has undertaken great effort to distinguish Texas' entry into deregulation from California's attempt at deregulation. The Public Utility Commission is correct in its position that California's attempts at deregulation were doomed by its inadequate supplies of electricity. For the time being, Texas is not burdened by this problem, having projected a surplus of generation capacity for the next several years. This means that Texas, unlike California, is unlikely to experience price gouging in the face of a capacity shortage. However, the perceived surplus in capacity may create a different economic perversity that will impact ratepayers' pocketbooks. As the major utilities spin off generation 1813\O0~na~uno030113gtng 10