What can energy consumers expect this year as the Texas Legislature convenes for its 84th regular session? Will lawmakers pass laws to lower bills or will they take actions that have the opposite effect?
The session begins January 13. Here are a few issues that lawmakers may consider that could impact what Texans pay for their gas and electric service.
- SYSTEM BENEFIT FUND: In Texas — thanks to disbursements from the System Benefit Fund created as part of the electric deregulation law — low-income ratepayers receive bill discounts during the summer months. After 2015 there will remain unspent in the System Benefit Fund approximately $200 million, money collected for the specific purpose of helping low-income ratepayers. The low-income discounts will end after August unless the Texas Legislature takes action to appropriate that money for its intended purpose.
- RECIPE FOR HIGHER GAS RATES: CenterPoint Energy successfully lobbied the Railroad Commission this year for rule changes that make it more difficult to oppose gas utilities in rate cases. State lawmakers considered and rejected the CenterPoint rules during the 2013 legislation session, but they’ll take effect anyway unless the issue is revisited during the 2015 session. Consumer groups and city officials agree the rules will lead to higher gas rates.
- BILLION-DOLLAR BATTERY BILL: Oncor, a monopoly electric utility that serves electric customers around the Dallas and Fort Worth area, wants to install battery storage units on distribution lines. The project could cost billions of dollars. Oncor says the batteries will improve electric reliability, but the company needs legislative authorization to proceed. Questions remain as to whether the batteries will save money, and whether the company’s captive ratepayers should be required to pay for them.
- ONE-WAY RATEMAKING: Electric utilities take advantage of various regulatory mechanisms that allow them to increase rates quickly. One such mechanism is the “Distribution Cost Recovery Factor,” which was authorized by the Texas Legislature during 2011. The DCRF allows electric utilities to quickly increase rates to reflect new capital expenditures on their distribution system, although it does not include a parallel provision to lower rates when distribution expenditures decline. In that sense, the DCRF can only lead to higher rates, not lower ones. The DCRF statute is set to expire in 2017 — unless lawmakers take action this year to extend it.
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.