Lucio Masthead Graphic
Press Release
March 15, 2007
Contact: Doris Sanchez , Press Secretary
(512) 463-0385

AUSTIN, TX -- Today the Senate passed a comprehensive package of electric utility reforms to improve competition in the deregulated retail electric market, discourage market and price manipulation, and bring rate relief to Texas households.

"Electric utility rates are out of control and we need to reel them back in. We had rates nearly as high as 18 cents per kilowatt hour in South Texas for 2006," said Sen. Eddie Lucio, Jr. "While rates have dropped this year to 15 cents per kilowatt hour, I'm still concerned that those rates are too high and the deregulated electric market needs major reforms. That's why these bills, as passed in the Senate, are so important."

On Monday, an independent report concluded that one of the largest generators of electricity in Texas manipulated the wholesale electric market, causing at least $70 million in higher electricity prices across the state in 2005.

To address this abuse, Sen. Lucio was successful in persuading members to adopt an amendment that requires companies to refund customers for their overpayments if they are found by the Texas Public Utility Commission (PUC) to have manipulated the market. The PUC would have the authority to either order refunds or allow offending companies to pay an equivalent amount to community action agencies for emergency bill payment assistance programs.

"I want to make it clear that those refunds must be passed to consumers, either through direct refunds or by payments into an emergency assistance program," explained Sen. Lucio.

His amendment also requires that the PUC act promptly in making their final determination and assessing administrative penalties after an independent study of market power abuses is reported to them. The Commission would then refer the matter to the Office of the Attorney General for further action, investigation and prosecution.

"If we are to continue with the deregulated electric utility market," said the Senator, "we need to be firm and penalize those who attempt to manipulate the market and profit unfairly off the backs of working Texans.

"Although I support these bills, I was disappointed that they do not address any protections for the System Benefit Fund, a program that assists qualifying low-income Texans with paying their utility bills. I offered an amendment to this effect, but it was not added to the bill," he said. "I am gravely disappointed that the SBF Fund was swept up for other general revenue programs last session rather than electric utility assistance.

"This is not what we told ratepayers the fee would be used for," Sen. Lucio added. "We should not continue to sweep the SBF for general revenue when there are needy Texans struggling to pay their electric bills. Ratepayers are assessed a fee for this assistance program; therefore, the fund should be used for what it was intended."

The bills will now be sent to the House for consideration.

Note: Senior Policy Analyst Perla Cavazos handles this issue for the Senator and can be reached at 512-463-0127.