Monday, April 14, 2014

The Impact Of Texas Deregulation Electricity

By Anita Ortega


On the 1st of January 2002, Texan legislators passed the Senate bill 7 to law. This bill squarely centered on Texas deregulation electricity. Statistical information about the consumption levels of electricity and the repercussions that come with it at shocking. The state tops in the US in energy consumption in general. As at now, the electric power stands at $24 billion and still rising. This can be compared to Spain and Great Britain consumption levels. These are the shocking statistics that prompted to that legislation. Texans ought to be aware of their energy consumption and check on their habits.

The introduction bill acknowledged the introduction of REPs (Retail Electricity Producers) which would complement the incumbent traditional producers like Texas Energy. The law gave liberty to customers to choose from a pool of REPs that has been formed in those areas that had opted in concerning the bill. 85% of the Texans made shifts from at least one REP to another since 2002. This showed the impact that the introduction of REPs had to the consumption of power and the preferences Texans had.

There are a number of these retail electric power producers namely: Austin Energy, Ambit Energy, Bounce Energy, Direct Energy, Reliant Energy, Dynowatt, Gexa Energy, Glacial Energy, Just Energy, Mega Energy, First Texas Energy Corporation. These companies lie subordinate to Electric Reliability Council of Texas (ERCOT).

Statistics show that at least 85% of Texans have made a shift from one REP to another since 2002. There are a couple of retailers they could pick from. The most common being: Austin Energy, Glacial Energy, Just Energy, Dynowatt, Direct Energy, Gexa Energy, Mega Energy, Bounce Energy, Reliant Energy, First Texas Energy Corporation and Ambit Energy, just to name a few. Electric Reliability Council of Texas (ERCOT) was therefore mandated to oversee these companies. It was to regulate and oversee the whole sector according to this bill.

With the deregulation, this meant this were controlled or governed by the rationality of the Texans. This can be evident through the increase in levels of consumption in the first two years of introduction of the bill. There was an increase of near 50% in consumption of energy in the state. This had to be put in check with pricing and legislation in order to curb a rather extravagant consumption of electricity.

The rise in consumption has led to increased environmental pollution. Texas is the leading state in the US in clean wind power. This is a positive gesture considering the fact that it tops in pollution. On the other hand coal energy is cheaper and that is why traditionally many companies opted to invest in it. However it pollutes the environment was much more compared to those powered by natural gas. This has forced companies to switch to more environmental friendly options to produce energy at a cheaper cost.

At the end, natural gas is the best was to go forward but basing on the demand of electric power it would be an under performance in terms of production. The endowment in terms of natural gas alone cannot fully support the Texans. That is why companies have opted to invest in a production method that does not pollute the environment.

Texans ought to take bold steps in order to turn around the electricity issues that are racking the state. Better legislation and energy efficient innovations are best options on the table.




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