Electric Rates

Electric companies can increase rates twice a year as natural gas prices go up, but two Houston-area lawmakers say there's no mechanism to bring the rate back down when natural gas prices drop. Houston Public Radio's Capella Tucker reports the two-lawmakers would like to see the issue added to the special session next month.

Lawmakers are being called back to Austin to address the school finance issue, but the Governor has the authority to add other bills to the session. Houston area Representatives Al Edwards and Sylvester Turner want to introduce two pieces of legislation to address electricity rates. Natural gas prices soared prior to and during the hurricanes of last summer.

"But as of January to where we are now the cost of natural gas has decreased about 23 percent. In fact we estimate anywhere between 23 and 30 percent. But the cost of electricity has not gone down."

The bill would give the PUC the authority to reduce rates based on natural gas prices. He says it could mean as much as $15 a month less. Reliant Energey Spokesperson Pat Hammond says they are not in a position to lower rates at this point.

"We agreed to delay ... $90 million in first quarter of this year."

Turner says the legislature can't wait until the regular session in 2007. As part of the electric deregulation bill passed in 1999 the so-called 'price-to-beat,' which holds Reliant, the incumbant provider, electric rates where they are, will go away.

"And so after January first of 2007 whatever the market will bear is what people will be charged for electricity."

Electric companies will no longer need to go before the Public Utility Commission for permission to increase rates. PUC Spokesperson Theresa Ghee ...

"As the statute is currently written with the price to beat slated to go away in January 2007 any change would have to be now and that time so that would be a pretty short time-frame."

Reliant officials say more regulation is not the answer to higher prices. They say a competitive market will provide better solutions. The two lawmakers are hoping to introduce a second bill that addresses the system benefit fund. Every electric bill has a 65 cent surcharge that is supposed to provide a ten to 20 percent discount for low-income customers.

"Last year in its infinite wisdom changed that. On your electricity bill you will see a surcharge on you electricity bill. You are still paying for it. But the legislature has redirected those monies for the poor to other areas."

Turner says 400,000 low-income Texans are no longer receiving assistance and more than $130 million is being diverted to general revenue for the state. Turner and Edwards are calling on the legislature to either restore the System Benefit Fund or to eliminate the surcharge. Capella Tucker, Houston Public Radio News.

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