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As a result, most Texas power customers can choose their electricity service from a wide variety of "Retail Electrical Providers" (or REPs) The "local wires" utility in the area still maintains the power lines, only the companies generating electricity were affected. Since 2002, approximately 85% of commercial and industrial customers in Texas had switched power providers at least once. BackgroundThe state of Texas is the largest electricity market in the United States; Texas also ranks as the 11th largest worldwide market, falling between Great Britain and Spain in terms of annual consumption.
SystemThe law designated the Electric Reliability Council of Texas (ERCOT) would have the authority to oversee grid reliablility and opertaions so as to ensure no particular buyer or seller would gain an unfair advantage in the marketplace www.ece.iastate.edu/ece-homepage/seminars/information-infrastructure-ins/market-design-and-gaming-in-co.html (See Agencies and Influence: Another Special Case--ERCOT (The Tangled Web Redux) Christy Woodward Kaupert in Texas Politics Today. "Aggregators" are legal entities that join together two or more customers for the purpose of purchasing electricity at reduced rates. Although there are almost 200 aggregators registered with the Public Utility Commission, perhaps only 25 or so are still active in terms of acquiring and managing customers.
The "price to beat"Included within SB7 was a regulated rate concept governing the pricing behavior of the ex-utility providers known as the "Price To Beat" or PTB. The PTB serves as a target against which potential entrants to the market in an area compete. For example, a PTB price that is fixed at the actual wholesale procurement price of electricity does not give potential entrants a margin upon which to compete against incumbent utilities. During 2005, the "Price To Beat" became a ceiling or cap on rates charged by the firms prior to deregulation. From 1 January 2007, these incumbent firms will be allowed to charge their customers with rates that are not subject to regulatory oversight.
Entry of new firmsSince 2002, other companies such as Constellation Energy and FPL Group have entered the ERCOT market for the purpose of gaining market share. More than 60 startup firms have been formed specifically for the Texas electricity market, split almost equally among commercial-usage focused firms and residential-usage firms.
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