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Change
is coming to Texas electric utilities in 2002 when some consumers in Texas can
select the supplier of the generated electricity that they use in their homes
and businesses. The electricity will still be delivered
by the current local utility through the same wires as it is today. It's
just the source of the electricity that is the subject of industry restructuring.
Fortunately for customers of electric
cooperatives and municipal utility systems across the state, selection of a
generation provider will not occur until there is proof that such selection will
actually save consumers money and that consumers will not suffer under a new
system.
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Why is Southwest Texas Electric Cooperative being
cautious about this? Because you could be
at risk in this big experiment.
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Some say restructuring will bring lower electricity
bills for large industrial consumers.
Some say that it will
eventually bring lower electricity bills for residential and small business
customers. Many others say that restructuring could result in poorer service
and higher bills for small consumers, particularly in rural areas and small communities
across the state.
Why the skepticism?
Because in other industries, restructuring- or "deregulation" as some
call it- has had a mixed results, again, particularly in the rural areas and
small communities. If not done properly, restructuring can simply mean higher
prices and poorer service for most people. That's why Southwest Texas Electric
Cooperative must see proof that it is working before going to the expense and
trouble of changing a system that already provides safe, reliable electricity
at affordable prices.
The board of directors of Southwest Texas Electric Cooperative has the responsibility of deciding when
and if restructuring makes sense for our members and will seek your advice.
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Frequently
Asked Questions
Q:
Under restructuring, would I have to choose a new electric supplier?
A: No.
You wouldn't have to change.
Q:
Are co-ops against
choice?
A:
No.
We are against rushing into anything that might not be advantageous to our member-consumers.
Telephone, airline and railroad deregulation, for example, have had their down
sides. Deregulation of these industries has not always resulted in benefits for
customers, especially in rural areas and small communities. And once a decision
to change is made, it cannot be revoked.
Q:
Are co-ops the only
ones that have flexibility to wait?
A:
No. San
Antonio, Austin, Brownsville, Lubbock and about 70 other municipalities
are weighing their options, which are the same as the co-ops'.
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Q:
Why aren't co-ops and municipally owned utilities required to compete like the
investor-owned utilities are?
A:
Because when Texas legislators approved electric
restructuring in 1999 they recognized that member-owned electric co-ops and
city-owned systems are locally based and that they operate under a democratic
business model. Co-op boards of directors and members must decide what path to
take. The co-ops' goal, as It has always been, is to serve you conscientiously
and efficiently at the best possible cost.
Q: When
will my co-op make its choice?
A: Each co-op will decide in its own time. Some
may wait to see what the real costs are going to be. Your co-op will opt for
competition only if benefits you. |
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If
you have additional questions, send us an e-mail
and we will be happy to answer them or call Eddie Albin at (915) 853-2544 for
more information.
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How
Co-op Power Comes To You
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Generation
Facility:
The plant that produces electric current, the power source.
The generated
power is the only part of your service that will be de regulated under the
new law.
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Transmission of
generated power is sent over these high-voltage lines.
Transmission Lines:
The high-voltage lines that carry electric current from the
power plant to the distribution system.
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These lines bring the power to a
consumer's home or business.
Distribution
System:
The local network that delivers electricity to
retail customers. Co-ops, municipalities and investor owned utilities can own distribution
systems.
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Even if your
co-op decides to offer choice and
you choose a different electric provider, your co-op will still own the area
distribution power lines and deliver the electric power to you.
Below
is an example of a California electric bill for generated power and for the
transmission and distribution of the power under restructuring.
In this sample bill from California, a restructured marketplace, the
customer pays separately for the transmission and distribution of power
(Electric Energy) to home or business.
Why
Co-ops Are the Best Choice
Whether
or not your co-op chooses to deregulate, be assured that your locally owned,
locally managed co-op will continue to be your best choice.
Sixty years ago, co-ops were created to
bring electric power to rural areas that the investor-owned utilities (IOUs)
didn't want to serve. We're still here to serve you-and dedicated to bringing
you the best service with the newest technology at the fairest price.
The same dynamics of 60 years ago may
still exist today. Consider Pennsylvania. After a couple of years of
deregulation there, no private providers have stepped forward to compete against
cooperatives. And in California, electric prices are sky- rocketing. They didn't
plan ahead, power is in short supply, and consumers are outraged.
Big companies
spend billions in advertising to convince you that they are your friends and
neighbors and have your best interests at
heart. But remember, they are
responsible to their stock holders on Wall Street. Their top priority is to
maximize profits.
Co-op employees
are your neighbors. In fact, they are member-consumers like you. Your co-op is
in business solely to provide the
best, most reliable service to its membership. In the newly restructured market,
as in the past, any decisions made by
your co-op board will have the objective of providing a benefit to you, our
co-op member- consumer.
These West Texas
co-ops - Big Country, Coleman County, Comanche, Concho Valley, Southwest Texas,
Rio Grande and Taylor - have decided to "wait and see" if
competition will bring any true benefits to their members and the communities
they serve.
Glossary
Competition Transition
Charge (CTC): A fee that deregulated
investor-owned utilities (IOUs) may charge consumers for up to 15 years to
compensate them for expensive, above market-cost plants. For example, nuclear
plants built before de regulation probably can't effectively compete with newer,
cheaper plants. Co-op customers will not have this fee.
Distribution
System:
The local network that delivers electricity to
retail customers. Co-ops, municipalities and investor owned utilities can own distribution
systems.
Generating Plant:
The plant that produces electric current, the power source.
Grid:
An arrangement of power lines connecting power plants and
consumers over a large area, allowing for transmission and distribution of generated power.
Retail
Electric Provider (REP): A
seller of electricity and other energy services to consumers. A retail electric
provider may not own or operate generation assets.
Transmission Lines:
The high-voltage lines that carry electric current from the
power plant to the distribution system.
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