Last week, the Public Utility Commission (PUC) of Texas adopted a final order which will give more Texans the ability to save money on their electric bill by shopping for a lower rate from a competing electricity provider.
Specifically, the Commission approved a plan that will bring electric choice to the former Cap Rock service areas now owned by Sharyland Utilities. The Commission's order will extend electric choice to some 44,000 customers in Sharyland's Stanton, Colorado City, Brady, and Celeste divisions on or about May 1, 2014, with the final transition date dependent on a subsequent PUC order.
Last week's order caps a process that began informally four years ago when dozens of customers at Cap Rock Energy complained to the PUC about high rates and the lack of choice in the service area. In 2008, customers at Cap Rock noted that electric rates in parts of Texas open to choice -- such as Dallas -- were significantly cheaper.
Currently, the residential electric rate at Sharyland's former Cap Rock service area is about 11 cents per kWh.
That's about 50% higher than electric rates in the Oncor service area which has choice, and which is the part of the electric grid that is most similarly situated to the former Cap Rock territories, and is a good proxy of the lower electric rates customers at Sharyland's Stanton, Colorado City, Brady, and Celeste divisions can expect in the future.
How will the transition to choice at the former Cap Rock territories work? Sharyland will educate customers about their ability to shop for an electricity provider through several mechanisms. Before the transition to choice occurs, customers will have the ability to choose their electricity provider for "Day One" of electric choice.
If customers do not make an affirmative choice, they will be placed with one of several "default" retail electric providers when the transition to choice occurs. This is different from what happened when other service areas moved to choice back in 2002, when all non-shopping customers were placed with a single "affiliated" retail electric provider, which charged a "Price to Beat" that was set by the PUC.
In contrast, the default retail electric providers at Sharyland will be allowed to charge a market-based electric rate that may vary month-to-month, which will not be set by the PUC. This could expose customers who do not choose their own electricity provider to volatility in their monthly energy bill. However, customers placed on the default service will always be allowed to shop for a lower rate, and leave the default retail electric provider, without any penalty or cancellation fee.