Deregulation and San Patricio Electric
CO-OPS have a choice in deregulation
Texas Senate Bill 7 exempted cooperatives and municipalities from Deregulation. Why? This is due to the fact that the services and facilities are owned by the members/customers and run on a democratic business model. San Patricio Electric Co-op's members elect their own board of directors, which in turn set co-op policy.
Does this mean that co-ops can not deregulate? Absolutely not!
It means that co-ops and municipalities may choose to "opt in or out" of deregulation. Unlike investor-owned utilities who do not have a choice. This gives SPEC the opportunity to wait and study the deregulated market to determine if deregulation will benefit the members. SPEC has worked hard to get ready in case SPEC was to enter the de-regulated market in Texas. SPEC has a leg up on the rest of the Coops in Texas as far as deregulation preparation and knowledge, but at this time SPEC does not plan to enter the market.
The advantage of waiting
Regardless of whether SPEC ultimately "opts in or out" of Deregulation, it will remain your power distributor. If we become deregulated and buy power at market prices, the generation part of your bill will reflect the generation cost. The other parts of your bill (transmission and distribution) will be unaffected.
Before deciding SPEC wants to know if Deregulation has raised or lowered rates for other Texas power customers, especially in rural areas. As previously stated, investor-owned utilities are privately owned, co-ops are owned by their members. Your SPEC board of directors is elected to set policy that most benefits the members.
Make sure it's right
SPEC intends to continue serving its members as we have since 1938. We intend to keep providing the same first class customer service, personal attention and competitive rates our members have come to expect.
Frequently Asked Questions About Energy Deregulation and Restructuring
Q: Are co-ops the only ones that have the flexibility to wait to decide whether to opt in?
A: No. San Antonio, Austin, Brownsville, Lubbock and about 70 other municipalities are weighing their options, which are the same as the co-ops'.
Q: Why aren't co-ops and municipally owned utilities required to compete as the investor-owned utilities are?
A: Because when Texas legislators approved electric restructuring in 1999 they recognized that member-owned electric co-ops and city-owned systems are locally based and that they operate under a democratic business model. Co-op boards of directors and members must decide what path to take.
Investor-owned utilities are dedicated to maximizing profits for their shareholders. SPEC’s goal, as it has always has been, is to serve you conscientiously and efficiently at the best possible cost.
Q: When will San Patricio Electric Coop make its choice?
A: Each co-op will decide in its own time. Many will wait and see what the real costs of deregulation will be. San Patricio Electric will opt for competition only if it benefits you, the member-owner.
Q: If my co-op opts in to restructuring, will I receive more than one bill?
A: Only if you request it.
Q: Are all co-ops against choice?
A: No. We are against rushing into anything that might not be advantageous to our member-consumers. Telephone, airline and railroad deregulation, for example, have had their down sides. Deregulation of these industries has not always resulted in benefits for customers, especially in rural areas and small communities. And once a decision to change is made, it cannot be revoked. Again, Co-op boards of directors and members must decide what path to take. |
