That’s the big question posed recently by the Fort Worth Star-Telegram. In a Sunday editorial, the newspaper applauded steps taken to ensure that regulated utilities pass along the savings, but say it is too soon to tell whether deregulated companies that market power to home customers will follow suit.
“We don’t know how much a residential user would receive if retail providers … pass on most of their tax break, but customers should get a bit chunk of it,” the newspaper said.
Monopoly transmission and distribution utilities — that is, companies like Oncor that serve Dallas and Fort Worth — cannot charge rates without first getting approval from the Texas Public Utility Commission. However most residential consumers receive electric bills not from these regulated utilities, but rather from deregulated retail electric providers — and under the state’s retail electric deregulation law these REPs have broad discretion to charge whatever they want.
The Steering Committee of Cities Served by Oncor, one of TCAP’s sister organizations, continues to work with Oncor and the PUC to make sure transmission and distribution rates appropriately reflect tax savings. Those utility rates will then flow through to REPs and, in theory, competitive forces should encourage REPs to lower their bills.
But the Star-Telegram fears that might not happen. The newspaper said it agrees with state Sen. Kelly Hancock, R-North Richland Hills, who has threatened REPs with new regulations if they don’t flow through the tax savings. The newspaper also said the PUC should promote on the state’s electric shopping website those retail electric providers that commit to pass along the tax savings. “That’s a good idea. … Consumers can then buy power from retailers who value them,” the newspaper wrote.
You can read the full editorial here.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.