Electric co-op companies say deregulation slowdown is a good thing for customers - KTRE.com | Lufkin and Nacogdoches, Texas

Electric co-op companies say deregulation slowdown is a good thing for customers

By Donna McCollum

San Augustine, Tx (KTRE) - Electric utility deregulation is designed to provide competitive prices for consumers. There is an exception. It's found in Deep East Texas. One of three power grids in Texas successfully convinced the legislature deregulation costs would outweigh the benefits. The Deep East Texas Electric Cooperative (www.deepeast.com ) sits just outside the state's primary power grid, ERCOT. (www.ercot.com ) It's one of several expansive grids across the nation. Deep East Texas Electric Coop manager Larry Warren points out the others on a map of Texas.   "This part of East Texas is not in ERCOT", said Warren while pointing to the section of Texas just east of San Augustine. "Nor is the Northeast part of Texas, and a portion of the Panhandle. They're in different power grids."

The sliver of Deep East Texas is in the Entergy power grid. Four years ago the state ordered Entergy to begin deregulation. It sent off sparks among the provider and its customers. Providers knew to become compatible to other power grids would be expensive.  "They would have to install devices that would allow them to import electricity in and it's very costly. And it would also require transmission upgrades to their system," explained Warren. The co-ops, municipalities and high energy customers argued that going competitive would be cost prohibitive. "it was determined it would be about a 15% increase to the transmission rates," said Warren, referring to a study commissioned by Entergy and others.  "And with the times we are in now, with money being as tight, the last thing our rate payers need is an increase. We're not to say we're against competition, but in order to upgrade the system the costs were too prohibitive."

Grids are connected geographically, but not electrically. This is to avoid a potential cascade of power outages. However, in order to become competitive the grids need to be able to transport electricity in a similar fashion. Right now Entergy is successful in serving its current customer base, primarily electric co-ops located across Southeast Texas. The cost to expand would have to be transferred to not only co-op customers, but also customers within ERCOT.  The 2009 legislature was convinced. Measures passed by a unanimous vote in both chambers. Legislation designed to buy Entergy and co-ops it serves more time to paln for a deregulated state is sitting on the Governor's desk for his signature. 

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