| At the end of 1999, Texas and 22 other states | | | | new jobs by moving aggressively toward solar |
| had begun deregulating their electrical utilities. Since | | | | power panel manufacturing and installation. Several |
| that time, Texas has successfully transformed | | | | groups are already lobbying the governor to aim |
| from a typical state-regulated electric utility | | | | for a plan to generate 1,000 MW of solar power |
| system to one that is 75% deregulated, allowing | | | | by 2015 and 5,000 MW by 2025. In March, 2010, |
| the bulk of its population to choose both their | | | | the Texas State Energy Conservation Office |
| electrical service provider and a service plan that | | | | awarded the City of San Antonio, the University |
| suits their lifestyle. | | | | of Texas at San Antonio and St. Philip's College |
| While only a handful of states have experienced | | | | some $3.7 million in grants to invest in new solar |
| problems implementing their versions of | | | | distributed energy generation capacity. This will |
| deregulation, all have regarded Texas as the | | | | triple the amount of the area's solar power |
| model to follow. Why? Texas is the number one | | | | generating capacity to 600 kilowatt (KW). Finally, |
| energy user in the country. Texas produces and | | | | design improvements by two Texas companies, |
| consumes more electricity than any other state. | | | | Exeltech and Entech Solar, both of Fort Worth, |
| And in spite of the sheer volume required to | | | | will make solar electric panels even easier to install |
| power up the state every day, Texas has made | | | | on consumers' roofs. |
| its deregulated electrical market succeed. | | | | The third reason deregulation succeeded has been |
| Ten years ago, Texas faced many of the same | | | | the transformation of the Texas electrical grid. |
| problems as the rest of the country under the | | | | Operation of the Texas grid has changed to |
| regulated electricity system. The industry had | | | | maximize its efficiency and increase reliability. |
| stagnated, few power infrastructure | | | | Neither had gotten off the drawing board during |
| improvements were being performed by the | | | | the regulated years. In fact, one hold over from |
| utilities to improve their efficiency in producing, | | | | those days is that the Texas grid is largely |
| transmitting, and metering electricity. Building new | | | | disconnected from the rest of the country and |
| generation plants was often a slow, bureaucratic | | | | presents significant challenges supplying power to |
| process because the utilities had to negotiate with | | | | the grids of both Texas and the rest of the |
| state regulators both how to build new generation | | | | country. In spite of this, electric Transmission and |
| facilities and how to pass the expense on to | | | | Distribution Utilities (TDUs) have succeeded in |
| consumers. Developments in green energy were | | | | lowering transmission costs, both in terms of |
| under-funded and seldom progressed beyond the | | | | getting power to market and in reducing |
| experimental stage. The utilities also had little | | | | consumer energy waste. |
| incentive to improve service or innovate with | | | | In 2008, the Public Utilities Commission of Texas |
| emerging technologies because they had a | | | | (PUCT) set energy savings targets at 20% of |
| monopoly: they were guaranteed a profit that | | | | load growth for Texas utilities in 2009. This means |
| pleased their stakeholders. | | | | that if the increased demand measured 10 MW, |
| Throughout the country, however, more and | | | | Texas utilities had to save 2 MW through |
| more people demanded more and more electrical | | | | efficiency measures. To meet these goals, the |
| power. Already the second largest population in | | | | TDUs administer incentive programs while Retail |
| America, Texas is still among the fastest growing | | | | Electric Providers and energy efficiency service |
| states and is expected to have 50 million by | | | | providers implement the programs. The programs |
| 2040. Houston, Dallas, and San Antonio are among | | | | are open to all customers and have the goal to |
| the top 10 populated metropolitan areas in the | | | | reduce system peak demand, energy |
| country. The Austin area alone is expected to | | | | consumption and/or energy costs. |
| balloon to five times the current population over | | | | TDUs pay incentives or rebates to program |
| the next 30 years. | | | | participants for the installation of high efficiency |
| Texas is also the second largest economy in the | | | | equipment that produces measurable and |
| United States (15th globally), with an annual output | | | | verifiable demand savings (see TDUs do not pay |
| of over one trillion dollars. Unfortunately, Texas | | | | incentives directly to residential customers. |
| also emits 10% of total U.S. "greenhouse gases". | | | | Residential participants instead must go through a |
| Growing concerns about climate change and the | | | | third-party sponsor for energy efficiency |
| environment drove both state and federal | | | | measures installed in their homes. Non-residential |
| governments to pass mandates for developing | | | | participants can act as self-sponsors and be paid |
| new green alternative energies. ERCOT has | | | | directly for energy efficiency measures installed in |
| estimated that peak demand for Texas electricity | | | | their facilities or go through a third party. |
| increased at an annual rate of 2.5% from 1990 to | | | | The programs have been very successful. |
| 2006 and will experience similarly high annual | | | | Between 1999 and 2006, energy efficiency |
| growth, requiring between 60,000 and 80,000 | | | | programs have reduced peak demand by 756,000 |
| megawatts (MW) of new electricity generation | | | | kW and saved 2,005 million kilowatt hour (kWh) |
| capacity by 2030. | | | | per year. Texas utilities reported efficiency |
| State regulators, as well as industry experts, | | | | program savings of 457,808 megawatt hours |
| quickly realized that the regulated electric utility | | | | (mWh) in 2007. |
| system lacked the agility to meet the needs of | | | | Wind power is cheap only if you can get it to |
| the 21st century. | | | | market. In February, 2009, the PUCT assigned |
| Why Did Texas Succeed? | | | | approximately $5 billion of transmission projects |
| There are four reasons why the deregulated | | | | to be constructed in Texas' Competitive |
| utility market succeeded in Texas. The first is | | | | Renewable Energy Zones (CREZ). The CREZ |
| that deregulation stimulated new investment in | | | | power-line projects represents one of the largest |
| electrical generation to meet demand and add | | | | power transmission improvement projects in the |
| reliability. Where power companies once had to | | | | state's history. New transmission lines will be in |
| petition the state regulators for permission, they | | | | service within four or five years, eventually |
| now build facilities when they see the potential for | | | | transmitting 18,456 MW of wind generated power |
| profit. In Texas, this led to an investment of over | | | | from West Texas to the power-hungry |
| $25 billion in 39,000 MW of new generation and | | | | metropolitan areas of the state. |
| ensured that investors, not consumers, took the | | | | The final reason for success is that deregulation |
| risk on the sale of all of that electricity. Most of | | | | dismantled the monopolies and introduced market |
| this investment was in low-polluting natural | | | | competition. After all, a reliable and growing |
| gas-powered generation plants. Today, over half | | | | electricity system is all about managing supply and |
| of Texas' electric power comes from natural gas. | | | | demand. So, instead of one company making |
| Texas produces 25% of the nation's natural gas | | | | power, transmitting power, and billing you for the |
| and is the largest producer; storing and supplying | | | | power in a one-size-fits-all format, the electricity |
| natural gas via pipeline for all regions of the | | | | market integrates wholesale and retail competition. |
| country. | | | | Generation is separate from retail. Because |
| The investment and building generation capacity | | | | retailers and their customers can choose where |
| also added something that Texas needed as a | | | | they buy power from, power generating |
| rapidly growing state: reliability. For example, on a | | | | companies are forced to produce power more |
| hot July day, electricity demand in the ERCOT | | | | efficiently because they are competing with other |
| area can threaten to overload both generators | | | | generator plants in other counties — and in |
| and transmission lines. The result would be a | | | | some cases, even in other states. Retailers, |
| blackout of large areas of the state. By building | | | | meanwhile, have to be more efficient and careful |
| additional generators, more power can be | | | | in their purchasing and selling of power. |
| generated to make up for system short-falls. | | | | It is no secret that the Texas electricity |
| Also, different generators can be brought on line | | | | deregulation process has been rocky. Part of the |
| to take over for generators that need | | | | reason has been volatile fuel prices brought on by |
| maintenance or upgrades. | | | | international political and economic turmoil over the |
| The next reason is that restructuring has spurred | | | | years. However, markets don't guarantee the |
| the growth of more efficient, less-polluting | | | | lowest possible prices. They do guarantee the |
| electricity technologies. During the regulated utility | | | | best possible prices based on a customer's |
| years, innovation and alternative energy | | | | preference. Of course, when looking for the best |
| development languished, rarely moving beyond | | | | price, be it groceries or gasoline, information is a |
| the demonstration phase. However, both the rising | | | | consumer's best friend. In a deregulated market, |
| cost of energy production and concerns over the | | | | consumers can save money on their Texas |
| environment have spurred new development in | | | | electricity bills by staying informed about their |
| co-generation, combined cycle generation, and | | | | energy usage, their energy plan's pricing, and their |
| green power. Nationwide, there is a huge demand | | | | energy provider's competitors. The quickest way |
| for green power; customers are now more | | | | to lower your electric bill might mean shopping |
| aware of greenhouse gases and climate change. | | | | around for a better deal. |
| Currently, more companies sell green power than | | | | For example, residents in a Fort Worth seniors |
| ten years ago. This is not just because it is | | | | community recently had their eyes opened when |
| popular, but companies also see that green power | | | | columnist Dave Lieber of the Fort Worth |
| sources are less expensive to operate in the long | | | | Star-Telegram found that many were paying as |
| term than conventional systems. Two of the | | | | much as 14 or 15 cents per kWh. Why? Possibly |
| biggest innovations in green electrical power in | | | | because many had only known the old utility |
| Texas are wind and solar power. | | | | monopoly their whole lives. They were used to |
| Currently Texas leads the nation in | | | | the state making the choices and setting the |
| wind-generated energy production with over | | | | prices. This was an incident where just a little |
| 9,000 MW of installed wind energy. Over 2,000 | | | | information can save you a lot of money. |
| wind turbines operate in the West Texas hills | | | | Remember the place to begin shopping is at |
| alone and the numbers continue to increase with | | | | Powertochoose.org. |
| development costs dropping and wind turbine | | | | The past ten years have brought improved |
| technology improving. In 2007, Texas became the | | | | reliability to Texas' growing energy demands. The |
| first State to reach the milestone of one | | | | old regulated system never could have kept up. |
| giga-watt of wind capacity installed in a single year. | | | | Because of deregulation, there are more |
| At 736 MW, the Horse Hollow Wind Energy | | | | generation developments and greener innovations |
| Center in central Texas is the largest wind power | | | | that make power more efficiently. There is now |
| facility in the world. Recently, the state finalized a | | | | more reliability in power transmission with |
| plan for a 17,000 MW increase in wind capacity | | | | efficiency cutting both waste and energy cost in |
| that will meet the federally mandated Renewable | | | | Texas. And finally, market competition has |
| Portfolio Standard (RPS) years ahead of schedule. | | | | stimulated generators and retailers to cut their |
| In spite of the defeat in 2009 of a $500 million | | | | costs to deliver better service at a lower price to |
| state legislature plan to develop solar energy in | | | | consumers. |
| Texas, the interest in taking advantage of Texas | | | | That's why all the other states are following |
| sun is still shining. A University of Texas study | | | | Texas. |
| found the state could generate up to 123,000 | | | | |