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The deregulation of energy in Texas encourages innovation and is the model for other states to follow (part 1)

In late 1999, Texas and 22 other states began to deregulate its power plants. Since then, Texas has successfully converted a typical utility regulated by an electrical state that is 75% deregulated This allows the majority of its people to choose their electricity provider as a service plan that fits your lifestyle.

Although only a handful of states have struggled to implement their versions of deregulation, have stated that the Texas model. Why? Texas is number one energy users in the country. Texas produces and consumes more electricity than any other State. And despite the volume needed for the state's power every day Texas, made his deregulated electricity market success.

Ten years ago, in Texas, facing many of the same problems as the rest of the country in regulated electricity system. The industry has stagnated, some infrastructure improvements have been able to by companies to improve efficiency in the production, transmission and metering of electricity. building new generation is often slow and bureaucratic, because the utilities have been negotiating with state regulators as to how to build new generation facilities and the way to go the burden on consumers. The evolution of the energy Green has been in deficit and rarely passed the experimental stage. The utilities also had little incentive to improve service or to innovate with new technologies, as it had the monopoly: they are guaranteed a profit and pleasure of its parts stakeholders.

Nationally, however, require more and more electrical power. Already the second largest population in America, Texas remains one of the fastest growing states and is expected to be 50 million in 2040. Houston, Dallas and San Antonio are among the 10 regions metropolitan population in the country. The Austin area alone is expected to balloon to five times the current population in the next 30 years.

Texas is also the second largest economy in the U.S. (15th worldwide), with an annual production of over one billion dollars. Unfortunately, Texas also emits 10% of the total emissions of greenhouse gases USA.

Growing concerns about climate change and the environment has place both federal and state governments to adopt mandates for the development of green energy alternatives. ERCOT has estimated the maximum electricity demand in Texas grew at an annual rate of 2.5% from 1990 to 2006 and the experience even more growth each year, requiring between 60,000 and 80,000 megawatts (MW) capacity new electricity generation in 2030.

State regulators and industry experts, quickly realized that the regulatory system power stations lacked the flexibility to meet the needs of the 21st century.

Why Texas got it?

The four reasons why the deregulated utility market in Texas was successful. The first is that deregulation to encourage investment in electricity production to meet demand and add reliability. When energy companies once the petition state regulators for permission, now construction of facilities when they see the profit potential. In Texas, which led to an investment of over U.S. $ 25 billion next-generation 39,000 MW and ensure that investors, not consumers, has assumed the risk of the sale of all electricity. Most of these investments has been low-polluting power plants natural gas. Today, more than half of the Texas electricity comes from natural gas. Texas produces 25% of the nation's natural gas and is the largest producer, storage and supply of natural gas by pipeline for all the regions countries.

The investment and production capacity has also added something that Texas, as required by increasing State: reliability. For example, on a hot July day, the electricity demand in ERCOT zone may jeopardize both the producers overload and transmission lines. The result would be a failure of large areas of the state. With the construction of additional generators, more power can be generated to compensate the system falls short. In addition, different generators may be placed online to take charge of generators that require regular maintenance or development.

The next reason is that restructuring has boosted the growth of cleaner more efficient technologies for electricity. During the years of regulated services innovation and alternative energy development languishes, rarely go beyond the demonstration phase. However, the increased cost of production energy and environmental concerns have promoted the development of new cogeneration, combined cycle, and green energy. Nationally, there is great demand green energy, customers are now more aware of the emissions of greenhouse gases and climate change. Today, most companies sell ago Green Energy years ten. Not only because it is popular, but companies are getting the Green energy sources is less expensive to operate long-term systems conventional. Two of the biggest innovations of the Texas green electricity is wind and solar.

Texas currently leads the nation in wind energy production with more than 9,000 MW of installed wind. In 2000 wind turbines operating in the hills of West Texas alone, and the numbers continue to increase with the cost of lower development and improvements in wind technology. In 2007, Texas became the first state to reach the milestone of one giga-watt of installed wind power one alone. 736 MW, the hollow horse Wind Energy Center in central Texas is the largest wind energy center in the world. Recently, the State has finalized a plan for an increase of 17,000 MW of wind capacity that will meet the federally mandated Renewable Portfolio Standard (RPS) years in advance.

Despite the defeat in 2009 of a plan of $ 500 million the state legislature to develop solar energy in Texas, the interest to enjoy the sun always shines on Texas. At the University of Texas study the state could generate up to 123 000 new jobs moving aggressively toward making solar energy panels and installation. Several groups are already lobbying the Governor's plan to generate 1,000 MW of solar energy by 2015 and 5,000 MW in 2025. In March 2010, the Texas State Energy Board Conservation awarded the City of San Antonio, the University of Texas at San Antonio College and San Felipe about 3.7 million in grants to invest in new capacity distributed generation of solar energy. Will triple the amount of solar energy capacity in the region produce 600 kilowatts (KW). Finally, design improvements by the Texas two companies, Exeltech and Entech Solar, both of Fort Worth, will make solar power even easier to install on roofs consumer.

The third reason was successful deregulation has been to transform the electricity grid in Texas. The operation of the network Texas was modified to maximize efficiency and increase reliability. Nor was off the drawing board for years regulated. In fact, a squeeze these days is Texas network that is largely isolated from the rest of the country and electricity networks presents major challenges of the two in Texas and the rest of the country. However, transmission and distribution (TDU) have reduced transmission costs, both in terms of being able to go to market and reduce the waste of energy consumers.

In 2008, the Public Utility Commission of Texas (PUCT) to establish an energy savings of 20% of the growing burden of public services in Texas in 2009. This means that if demand measured at 10 MW, Texas Utilities had to save 2 MW through efficiency measures. To achieve these objectives, incentive programs TDU in the administration of retailers and service providers to implement electric energy efficiency programs. The programs are open to all customers and are designed to reduce system peak demand, energy consumption and / or energy costs.

TDU the level of premiums or discounts to participants the program for the installation of high performance that produces the demand for measurable and verifiable savings (see www.texasefficiency.com). TDU pay no direct incentives to customers residential. participants instead of the housing must pass through a third party developer of energy efficiency measures installed in their homes. Nonresidential participants can act as self-promoter and is paid directly to energy efficiency measures in their facilities or go through a third party.

The programs were very successful. Between 1999 and 2006, energy efficiency programs have reduced peak demand of 756 000 kilowatts and 2.005 million hours of kilowatt-hours (kWh) per year. Public Services Texas has reported the effectiveness of the program saving 457,808 hours of megawatt hour (MWh) in 2007.

Wind energy is cheaper if you can get on the market. In February 2009, the PUCT issued approximately $ 5 billion in transportation projects to be built in areas of Texas Competitive Renewable Energy (CREZ). Crezer power line project is one of the largest projects to improve power transmission in the state's history. Line breaks Transportation will be in service within four or five years, possibly transmit 18 456 MW of wind energy in West Texas power-hungry state metropolitan area.

The last reason for success is that deregulation has dismantled monopolies and competition from established market. After all, reliability and growth has to do with the management of supply and demand. So, instead of a company that makes power, power transmission, and charge you a single power size for all formats, the electricity market competition includes wholesale and retail. The generation is different from retail. Because retailers and customers can choose where to purchase electricity from starting, the power generation companies are forced to produce energy more efficiently because compete with other generating plants in other counties – and in some cases even in other states. Traders, meanwhile, should be more effective and more cautious in their purchase and sale of energy.

It is no secret that the process of Texas electricity deregulation has been unstable. Part of the reason has been the instability fuel prices caused by international political and economic turmoil in recent years. However, markets do not guarantee the lowest price possible. They guarantee the best price possible depending on customer preferences. Of course, when the best price, be it groceries or gas, information is the best friend of a consumer. In a deregulated market, consumers can save money on your electric bill in Texas to stay informed about their energy consumption, prices terms of their energy and their energy supplier competitors. The best way to reduce your electric bill could mean buying a better deal.

For example, residents in a community of older people in Fort Worth recently, columnist Dave Lieber eyes opened when the Fort Worth Star-Telegram found that many have paid up to 14 or 15 cents per kWh. Why? Perhaps because many have known that the former monopoly utility for life. Have been used for the state to make decisions and pricing. It was an incident where only one bit of information can save you money.

Remember the place to start research href = "http://www.powertochoose.org/_content/_compare/compare.aspx"> Powertochoose.org.

The last ten years have brought greater security Texas growing energy demand. The old regulated system ever held. Due to deregulation, there are developments generating more and more innovations environmentally friendly that make the power more efficiently. There are now more reliable power transmission with a cutting efficiency of both waste and energy costs Texas. And finally, market competition has encouraged producers and distributors to reduce costs to provide better service at lower prices for consumers.

Therefore all other states are following Texas.

About the Author

Vernon Trollinger is a writer for Bounce Energy. Bounce Energy is a Texas Electric Company based in Houston. Bounce Energy’s goal is provide more than low Texas Electric Rates to our customers. With innovative and flexible plans, excellent customer service, and superior customer rewards, Bounce Energy offers a unique approach to Texas electricity.

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