Texas Electricity Basics

Transcription

1 Basics EnergyWize Agent Certification Program

2 Introduction OBJECTIVE After completing this training, you should feel comfortable with how the competitive electricity market works in support of your efforts to sell electricity services with EnergyWize TOPICS COVERED o Background o Benefits o Power Generation Companies o Transmission & Distribution Service Providers (TDSPs) o Retail Electric Providers (REPs) o Public Utility Commission of (PUCT) LENGTH Approximately 18 minutes (12 slides) 2

3 Background Why energy deregulation? The business model of a single provider for energy services in most areas of the U.S. is outdated Energy deregulation in some form has occurred in over 50% of the states across the U.S. energy deregulation went into effect on January 1, 2002 deregulation only Before All customers purchased their electricity from their local electric utility One company in each service area was both the provider and distributor of electricity After A company can no longer be both a provider and distributor of electricity Customers have a choice of electricity providers 3

4 Benefits Lower Prices When customers can choose between rival competitors in an industry, the most successful gives their customers what they want for the lowest price Efficiently Meet Ever Increasing Demand for Energy removes the public's financial risk for investing in electrical generating plants and transfers it to private investors Increased Investment in Clean Energy Most investment in new generation capacity has been in energy efficient generating technologies including wind and solar Better Cost Management & Innovation Private companies are better at managing costs by investing in new technologies, adopting best practices, and improving energy efficiency 4

5 Overview Power Plant Generates Energy Transmission Lines Carry Long Distances Distribution Lines Carry To Customers Homes and Businesses Use Power Generator ( Wholesalers ) Transmission & Distribution Service Provider (TDSP) Not Retail Electric Provider (REP or Energy Provider) Power generation companies own and operate power plants. Power generation companies operate in a competitive market and sell their power to REPs. (Scheduling & Control) TDSPs are responsible for maintaining the poles, wires, and meters that deliver and measure the electricity consumed by a home or business. The PUC continues to regulate TDSPs by setting the rates for transmission and distribution service, setting reliability and safety standards, and ensuring that all customers and REPs are treated the same when it comes to the delivery of electricity to homes or businesses. REPs compete to sell electricity directly to homes and businesses by offering a variety of different pricing options, renewable energy options, added customer service benefits, or other incentives. REPs are also responsible for customer service and billing. 5

6 Power Generation Companies Role of Power Generation Companies Own and operate power plants, including plants fueled by coal, nuclear power, natural gas, wind, water, solar power, or other renewable sources Generation by Fuel Sell power at wholesale to REPs, who package the power with transmission and delivery service for sale to homes and businesses REPs are not permitted under law to own power plants; however, they can be affiliated with a power generation company Impact of Traditional electric utilities now provide only a quarter of the state s electricity capacity With deregulation, independent power producers have flourished and now account for threequarters of electricity capacity 6

7 Transmission & Distribution Service Providers (TDSPs) Role of Transmission & Distribution Service Providers Delivers electricity Maintains the poles and wires TDSPs in s Maintains the reliability of the system Maintains and reads all meters Provides 24 hour a day emergency service Impact of The PUC continues to regulate TDSPs by setting the rates for transmission and distribution service, setting reliability and safety standards, and ensuring that all customers and REPs are treated the same when it comes to the delivery of electricity to homes or businesses Regardless of which REP provides the electricity to a home or business, the TDSP delivers the electricity 7

8 Retail Electric Providers (REPs) Role of Retail Electric Companies Purchase electricity from power generation companies and bundle with transmission and distribution services of TDSPs electricity to homes and businesses Offer value added energy services and programs Bill customers for electricity usage Provide customer service Impact of Lower prices, more service options, improved customer service Since 2002, approximately 85% of commercial and industrial consumers have switched power providers at least once ** Above list of REPs is not intended to be a complete list ** 8

9 Public Utility Commission of (PUCT) Purpose The Public Utility Commission of (PUCT) is the state governing agency that manages electricity and phone service in Mission Protect customers Foster competition Promote high quality infrastructure Key Responsibilities Enforce consumer protection laws Approve who can sell electricity in the state as Retail Electric Provider Regulate transmission and distribution of power Oversee the Electric Reliability Council of (ERCOT) that manages the flow of electric power to customers 9

10 s Open For Customers of investor owned utilities in most service areas have the right to choose their Retail Electric Provider s s NOT Open For City owned utilities and electric cooperatives may decide whether customers will have a choice o o 77 city owned utilities currently serve cities including Austin, Lubbock, and San Antonio 73 electric cooperatives provide electricity in communities throughout Over 6 million customers in have electric choice representing 2/3 of the population 10

11 Customer selects new REP and executes electricity agreement REP provides required regulatory documents to customer for review Customer has three days to review documents and cancel if desired REP sends request to ERCOT to switch customer from old REP to new REP ERCOT sends a postcard to customer to confirm decision and customer can cancel if not authorized ERCOT informs local poles and wires company (TDSP) of the change TDSP starts sending meter (usage) data to new REP so they can start billing the customer providers will not interrupt electricity service and the reliability of service is not affected by the choice of provider. All that changes is the company that sells and bills for power not the company that maintains the poles and wires that deliver electricity to the home or business. 11

12 THANK YOU EnergyWize Agent Certification Program