Ensuring that Texas has enough electricity to support growing demand in the coming years—and keeping it accessible and affordable for the average consumer—is at the forefront of the electricity debate the Texas Legislature is expected to address this session. Lawmakers plan to take up issues including the construction of new power generation plants, the evaluation of renewable subsidies to public power partnerships and the creation of simpler ways for consumers to compare the offerings of electric companies. "Texas is ripe for an energy plan," said Sen. Kirk Watson, D-Austin, in comments to newly elected lawmakers in November. Forecasts by the Electric Reliability Council of Texas, which operates the state's main power grid, show that Texas could find itself dipping below its ideal energy reserves in the next couple of years—a situation that officials said is not dire yet, but could become so if the state does not take steps to meet the growing demand. "The sky is not falling in Texas," said Rolando Pablos, a member of the state's Public Utility Commission, who called the state's rapid growth in population and business "a good problem to have." "We do not have a crisis mode going on, but in three to five years, if we don't do anything in the next six to 12 months, then we will have a crisis mode. We have the right capacity, but because of this tremendous growth [in population and business], we are acting proactively, not reactively." Dabbling in the issue of "resource adequacy," the buzzword for ensuring that the state has enough electricity to meet the demand, is something that legislators might not have the appetite for this session, Rep. Byron Cook, R-District 8, said. Cook heads the House State Affairs committee, which deals with much of the state's major infrastructure issues, including electricity regulation. "We have enough time where the PUC can address this issue in rule as opposed to a major legislative effort," Cook said.

Possible energy market changes

One possible solution, supported by power generation companies, is to create a "capacity market" to replace the current "energy-only" market. Right now, generators create the power and then sell it to retail providers, which then provide it to Texas homes and businesses. Under a capacity market, generators would receive additional payments from retail electric providers based on the size of the generator's fleet of power plants, in addition to what they receive for selling power. This system would be similar to grocery shoppers paying a fee for their shelf space in addition to buying groceries. A capacity market structure would result in billions of dollars going to the power generators, costs opponents said would be passed on to the consumers. The proposal is opposed by consumer groups for residential customers and large industrial power customers, as well as the Texas Public Policy Foundation, the state's conservative think tank, which said it would add more regulation.

Unlikely shift

Cook said that such a shift would not be likely in this session, saying that Texas does not need a Band-Aid created amid the politics and rush of a 140-day session. "Any move from the current energy-only market to a capacity market, that is a major undertaking, and we have to make sure we've got it absolutely right," he said. "And so I think we need to continue to look at this and make sure we make thoughtful long-term decisions and not do something in a compressed time frame that may have negative consequences. Everything I've seen leads me to believe that we have time to get it right with respect to this issue of resource adequacy." Rep. Dan Huberty, a Houston Republican and vice chairman of the State Affairs committee, said his panel would still hold hearings on resource adequacy issues and seek to push the PUC to make resource adequacy a top priority in the Legislature. "We're going stoke the fire, so to speak, because we need a plan," he said.

Finding the best deal

Some conservatives are pushing for the removal of a cap on how much generators can attempt to collect for power in the wholesale market. The wholesale "spot market" prices tend to spike during high-usage days, when the demand exceeds the supply, such as the hottest days of summer or when power plants are taken offline for maintenance. The proposal to remove the caps altogether has been rejected by consumer groups in Texas who say it is too radical, could undermine the market and can result in punishingly high price spikes. Consumer groups would like to see legislation increasing the penalties for market power abuses and a requirement that retail electric providers add information on their electricity bills about the benefits of reducing demand. Among their pushes is the creation of "standard-offer products," an idea also supported by senior citizens' advocates. This would require power companies to offer—in addition to their other packages, deals and promotions—one fixed-rate product with terms and conditions set by the PUC. Advocates say it would help consumers in deregulated markets find the best deals. "If you're shopping for electricity right now, it's just bewildering," said R.A. Dyer, policy analyst for Texas Coalition for Affordable Power, a coalition of more than 160 cities and other political subdivisions that purchase electricity. "This way you can compare standard-offer products one to another. The only difference is price. You're not going to get fooled by fine-print details."