Press Releases
Randolph Moravec, Ph.D, named Executive Director of Texas Coalition for Affordable Power
AUSTIN, TX — Monday, October 3, 2011 – The Texas Coalition for Affordable Power, the largest city coalition of its kind in the state, has announced the appointment of Randolph Moravec, Ph.D, as its first executive director.
TCAP is a coalition of 158 member cities and political subdivisions that pool their resources to purchase electricity for governmental use. Dr. Moravec has served on the board of TCAP since its inception in early 2011, and also served on the board of one of its predecessor organizations, the Cities Aggregation Power Project, Inc.
His appointment as TCAP executive director becomes effective Oct. 3.
“We’re excited to have Dr. Moravec taking the reins as the first executive director of TCAP,” said Jay Doegey, the coalition’s board president. “With his understanding of the electricity market and municipal government — and his extensive leadership experience — Dr. Moravec will help guide TCAP as it works to save money for Texas cities and their citizens.”
Dr. Moravec has served since 1987 as the finance director for the Town of Addison. He also served on the TCAP board as its organization’s secretary, and as vice chairman of the Cities Aggregation Power Project. Dr. Moravec received his Ph.D in public affairs from the University of Texas-Arlington in 2011.
As TCAP executive director, Dr. Moravec will execute policies developed by the organization’s 15-member Board of Directors, which is comprised of representatives of member cities. Dr. Moravec also will help coordinate the solicita- tion and award of electric supply contracts for TCAP, help expand TCAP’s membership, and respond to the needs of the organization’s member cities.
“I’m deeply honored to become TCAP’s first executive director,” said Dr. Moravec. “This is an important organization that works hard to save money for Texans. TCAP wants what all Texans want: a well-functioning electricity market that encourages economic development for our cities and a better life for our citizens. I’m happy to be part of that effort.”
TCAP’s 158 members include Abilene, Addison, Arlington, Belton, Corpus Christi, Frisco, Grand Prairie, Grapevine, Harlingen, Kingsville, Mansfield, McAllen, Midlothian, Nacogdoches, Odessa, Pearland, Plano, Port Aransas, San Angelo, South Padre Island, Sugar Land, Texas City, Vernon, Victoria, Wichita Falls, as well as many other cities and political subdivisions.
Through TCAP, those cities purchase in excess of 1.3 billion kilowatt/hours of power each year for street lighting, office buildings, water and wastewater plants and other municipal needs. Because energy purchases make up such a large portion of a city’s operating expenditures, even a single-penny increase in rates can equate to millions of dollars in lost tax dollars. Unaffordable electricity also can impact the welfare of city residents.
Report: $15.5 Billion in Excess Electric Costs under Texas Electric Deregulation
New Study from the Texas Coalition for Affordable Power: $15.5 Billion in Excess Electric Costs under Texas Electric Deregulation
Coalitions Representing More Than 150 Cities Send Letter Calling for Action by Texas Legislature
AUSTIN, Texas–(BUSINESS WIRE)–Excessive electricity prices under electric deregulation have cost Texans an additional $15.5 billion, according to a comprehensive new report on the deregulated market.
Judged in terms of increases in average electricity prices, the deregulated market in Texas has been one of the nation’s poorest performing, according to the report. It also cites evidence that Texans in deregulated areas consistently pay more for electricity than Texans in areas exempted from deregulation.
Citing the findings, the chairman of the two city coalitions that commissioned the report distributed a letter to state lawmakers this week calling for important reforms. The coalitions that commissioned the study, the Steering Committee of Cities Served by Oncor and the Texas Coalition for Affordable Power, represent more than 150 cities and political subdivisions in Texas with more than 3.5 million residents.
“This report shows that it’s time to fix deregulation,” said Jay Doegey, who chairs both coalitions. “We support electric competition — but competition that works for Texas residents and businesses. Years of electricity prices above the national average needlessly have cost Texans billions of dollars. These high prices have taken a toll on personal finances and the state’s economy. It’s money that could have been used for other priorities.”
The report, delivered this month to all members of the Texas Legislature, documents recent declines in electric prices in Texas (currently average residential prices are slightly below the national average), but found no evidence that those declines have compensated for years of inefficiency in the market. Judged in terms of changes in the average price of electricity, the deregulated market in Texas has performed worse than residential electricity markets in most other states — including most states with deregulation, the report shows.
Key findings include:
- In terms of increases in average residential electricity prices between 1999 and 2010, Texas ranks ninth nationally, fourth among 15 states with electric deregulation and third among 22 states with a reliance on natural gas to fuel generation plants.
- Since the Texas electric deregulation law took effect, Texas residential consumers have paid more than $11 billion in excess costs resulting from electricity prices above the national average. Prior to the adoption of the deregulation law, Texans consistently paid below the national average.
- All classes of Texas electricity consumers — that is, residential, commercial and industrial — would have saved $15.5 billion had prices remained at the national average since the beginning of retail electric deregulation. In the ten years leading up to the deregulation law, all groups of Texas consumers collectively paid $17.6 billion less than the national average.
- For every year there is data to make a comparison, residential consumers in areas of Texas with retail electric deregulation (such as Houston and Dallas) have paid average electricity prices higher than residential consumers living in areas of the state outside deregulation (such as San Antonio and Austin). Texans outside deregulation consistently pay below the national average, while Texans inside deregulation consistently pay above it.
- Recent declines in the price of electricity in Texas relate largely to changes in the commodity cost of natural gas, which is used to fuel many generation plants. However, data cited by the report show that the declines in average electricity prices have been less pronounced in deregulated areas, as compared to areas of Texas outside deregulation. This suggests that the deregulated market in Texas is much less nimble in its response to changing conditions, as compared to areas of the state exempt from deregulation.
Based on these findings, the city coalitions recommend the following action:
- The Texas Legislature should reject proposals to create new “streamlined” or “one-way” ratemaking rules. Such regulatory gimmicks will increase electricity prices in Texas and contribute to bloated utility spending. Texas utility lobbyists are currently pressing for such changes.
- Regulators should be given authority to assess higher fines for anti-competitive activities in the wholesale electricity spot market. A loophole that allows relatively small generators to engage in anti-competitive behavior should be closed.
- Electric generation companies that bid their power into the wholesale spot market at excessive prices should be promptly identified after they submit their bids. Such disclosures will discourage anti-competitive bidding practices. Texans ultimately must pay for this electricity and have a right to know where their money is going.
- Retail electric providers should be required to offer standardized fixed-rate products among their selection of other electricity products. This will make it easier for Texas residential consumers in deregulated areas to make apples-to-apples price comparisons when shopping for electricity.
The Story of ERCOT is based on months of research, including a review of journalistic accounts, regulatory documents, academic studies and data from the United States Energy Information Administration. It includes separate findings relating to the Electric Reliability Council of Texas, which is the organization that manages the state’s power grid. Those findings were detailed in an earlier press release.
The Story of ERCOT is available for download at www.tcaptx.com.
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6623921&lang=en
Contacts
for the Texas Coalition for Affordable Power
R.A. “Jake” Dyer, 512-322-5898
New Study Finds History of Mismanagement at ERCOT
Ordinary Texans Lack Representation in Organization at the Center of the Recent Blackouts
AUSTIN, Texas–(BUSINESS WIRE)–The Electric Reliability Council of Texas, the organization now under fire for the recent blackouts in Texas, has a history of missteps, mismanagement and broken deadlines, according to a new study released Monday to all members of the Texas Legislature.
Commissioned by two non-profit municipal coalitions, The Story of ERCOT documents an alarming increase in borrowing and spending by the organization and a lack of accountability to state officials and regulators. The report shows that self-interested industry players dominate the ERCOT board while Texas consumers, who indirectly or directly pay the entire cost of the organization and the electric market that it helps oversee, have only a limited voice.
The twin coalitions that commissioned the study, the Steering Committee of Cities Served by Oncor and the Texas Coalition for Affordable Power, represent more than 150 cities and political subdivisions in Texas. Jay Doegey, who chairs both coalitions, said the report shows that missteps at ERCOT have needlessly cost Texans hundreds of millions of dollars.
“Texans deserve better than this,” said Doegey. “Residential consumers and businesses — those who actually foot the entire bill for this organization — should have more representation on the ERCOT board. The out-of-control spending, mismanagement and lack of accountability must end.”
ERCOT’s performance during the recent blackouts is expected to become the subject of a key legislative hearing this week. ERCOT also came under fire during rolling blackouts in 2006.
Report also identifies problems with rules governing the wholesale electricity market
Separately, the report also includes important findings relating to the deregulated electricity market in Texas. The market is largely overseen by the state’s Public Utility Commission.
For instance, the report found that a legal loophole allows some electric generation companies to engage in anti-competitive activities. Another loophole prevents the PUC from ordering restitution to consumers or entities harmed by improper market manipulation.
The report also documents instances in which electric generators have sold power at levels well above their marginal cost, a sign that the Texas market is insufficiently competitive. Policymakers have rejected rules that would limit excessive prices in the wholesale market.
“Texans have paid billions of dollars in excess costs because of inefficiencies in the deregulated market,” said Doegey. “We support competition in the electricity market — but competition that works. It’s time to close the loophole on anti-competitive activities and time to fix the broken enforcement process. Big generators must not profit through deceit.”
Based on the findings, the city coalitions recommend the following legislative reforms:
*The Public Utility Commission should be granted greater authority over ERCOT’s borrowing and spending.
*Consumers ultimately pay all costs in the electricity market, but only control a minority of seats on the ERCOT board of directors. This should change.
* The PUC should be granted authority to order restitution to parties harmed by anti-competitive activities. A loophole that allows relatively small generators to engage in anti-competitive behavior should be closed.
The Story of ERCOT is based on months of research, including a review of journalistic accounts, regulatory documents, academic studies and years of data from the United States Energy Information Administration. It is available for download at www.tcaptx.com.
Gulf Coast Coalition of Cities Calls Upon CenterPoint to Slash Its Rates
The cities, which include Galveston, Dickinson, Sugar Land and others, are adopting ordinances this month that call for the rate reduction. The ordinances have the simultaneous effect of blocking a rate hike proposed by the company. “Electric bills in the Houston and Galveston area are already too high — consumers don’t need a rate hike. They need a rate cut,” said Julie Johnston, City Administrator for Dickinson. “The analysis by our city coalition shows CenterPoint already collects more than its need. Consumers’ electric bills should be lower.”
Statement by Jay Doegey, Chairman of the Cities Aggregation Power Project, Regarding Sunset Advisory Commission Recommendations on the PUC and ERCOT
“The Sunset Advisory Commission struck a blow for Texas electricity consumers on Tuesday by calling for more fiscal oversight of the Electric Reliability Council of Texas. Texans depend upon ERCOT to manage the power grid and to oversee much of the state’s deregulated electricity market. But ERCOT’s spending and borrowing have increased in recent years to alarming levels. Under recommendations adopted by the legislative Sunset Advisory Commission, ERCOT would face new requirements that it obtain prior approval from regulators for its annual budget and for its use of debt. CAPP recommended both accountability measures in the interest of protecting Texas consumers, who ultimately must foot the bill for ERCOT’s spending.”
Statement of Jay Doegey, Chairman of the Cities Aggregation Power Project, Inc., on free market reforms for deregulated Texas electricity.
“Like most other Texans, our city residents have suffered through the price hikes. We remember when our electric rates were below the national average, back before Texas deregulated its electricity markets. But almost as soon as the new market began, our rates shot well above the national average — and have stayed there. In fact, in the decade since lawmakers passed the deregulation law, the increase in average residential rates in Texas has outstripped the increases in almost every other state in the country, including the increases in most deregulated states.”
Statement of Geoffrey Gay, general counsel for several groups of cities that participate in both the regulated and deregulated energy markets.
“The Texas Public Policy Foundation, an Austin-based organization consistently cited by the electric industry to lend credence to anti-consumer policies, has released yet another misleading report about the dismal record of electric prices under deregulation. Here are the simple facts: for years before deregulation, Texas residential consumers paid rates below the national average. For years after market restructuring, Texans have paid rates above the national average.
Statement by Geoffrey Gay, General Counsel of the Cities Aggregation Power Project, Inc., relating to new electric industry report
In a new report, The Energy Retailer Research Consortium, an industry front group, attempts to mislead the public regarding the success of electric retail deregulation by comparing the Texas experience to the minority of states that have adopted retail deregulation. From an industry perspective, Texas is the leader of the other 13 states that have embraced deregulation. From a consumer perspective, Texas is the big loser.
