According to a press release Thursday from the Texas Public Utility Commission, electric customers in Houston ”will save more than $109 million in costs over the next 12 years” because of relatively low bond rates associated with a type of financing known as securitization.
The press release notes that the rates are the lowest since electric deregulation began in Texas.
“Securitization will reduce electricity costs by millions of dollars in the CenterPoint service area,” said PUC chairman Barry Smitherman, referring to city's transmission utility. “These savings are possible through the ... leadership of the Texas Legislature in making necessary changes in the law to help electric customers.”
But not mentioned by Smitherman or the PUC is that also thanks to the Texas Legislature, customers in Houston’s CenterPoint Energy territory are on the hook for more than $2 billion in so-called "stranded costs," which are related to big ticket utility investments.
Again, that's $2 billion. With a B.
Geoffrey Gay, a municipal attorney with expertise in utility matters, said the PUC is crowing about savings that are a “drop in the bucket” when compared to the unfair stranded costs borne by Houston residents.
“While technically correct, the news release is misleading in that consumers are disadvantaged because of the path that Texas has followed — consumers (in Houston) would be far better off had they not paid stranded costs,” said Gay, who represents various north Texas municipalities before the regulatory agency.
The stranded costs in Houston are a function of the Texas electric deregulation law, which was adopted by state lawmakers in 1999. Because of a deal between city attorneys and TXU in 2000, residents in north Texas pay no stranded costs.
"It's particularly offensive to ratepayers to suggest that securitization is a benefit, when it is a means by which stranded costs are recovered," said Gay.
The PUC release notes that the securitization savings in Houston are the result of House Bill 624, which was approved by the Texas Legislature in 2007. The new law allows the expanded use of securitization only if there is a benefit for customers, according to the PUC.
-- R.A. Dyer
Jerry Patterson, left, says he'll be watching the rest of the Republican presidential primary season from the sidelines now that that his first choice, Fred Thompson, has fizzled out. Patterson tells PoliTex that unlike Gov. Rick Perry, who embraced John McCain once Rudy Giuliani bailed, that he has no Plan B.
