Texas Deregulation: A Revolving Door of New Legislation, Compliance and Benefits

By Stream Energy Senior Director – Regulatory & General Counsel Darrin Pfannenstiel

A saying that is all too common in Texas is “if you don’t like the weather, just wait five minutes.” The same is applicable for deregulation and the regulatory landscape that governs retail electric providers (REPs) in Texas.

Although energy deregulation in Texas is arguably no longer in its infancy, Austin lawmakers continue to work diligently to review and revise current regulations in attempts to find equilibrium between the consumer and the REP.

New Legislation and Compliance

Stream Energy is incredibly active in the Texas deregulation evolution. Our firm strives to be a major player in educating policymakers on the energy industry and what is deemed fair to both our customers and the firm. If new legislature is proposed that will affect Stream Energy and the way we operate, it is our job to present our point of view and recommend revisions to the proposed legislation that is acceptable for both consumer and the retailer.

Not only does our Regulatory Counsel share the firm’s point of view with lawmakers, but we also act as an enforcement agency within our own walls. Any legislation that is passed by the Texas legislature goes into effect sometimes in fairly short order. Stream Energy and its employees must become familiar with the new laws and revise or enact procedures appropriately to ensure compliance by the effective date of the new regulations.

Most new legislation becomes effective on September 1, with the Public Utility Commission often promulgating regulations to help enact the legislation. As a result, Stream Energy must be in compliance with these new laws or face potentially significant fines and penalties.

Although the Texas regulatory landscape is still evolving in terms of deregulation, every deregulated state in the country has its own set of laws and regulations which also continue to evolve. That poses an entirely new set of challenges with each market that Stream Energy enters. One of the most challenging aspects faced by the Regulatory team is remaining updated on the laws in each state in which we currently operate or plan to operate. 

Benefits of Deregulation

In the 2011 Scope of Competition Report, the PUC of Texas reported that prices for consumers are lower now than before deregulation. The demand for customers grows with every new REP that enters the market, and the competition caused by deregulation has shielded consumers from high natural gas prices.

Deregulation has greatly expanded the number of energy providers that consumers may choose from. Before deregulation, there were only four or five utilities servicing customers. Now, consumers may select their energy provider from a field of over 20 REPs. This increase in REPs has created thousands of jobs in Texas and helped keep our state economy as one of the best in the nation during the recent recession.

With the revolving door of the Texas regulatory landscape, future legislation is as certain as death and taxes. As deregulation grows older and out of its infancy, the equilibrium between consumer and REP will be more evident.

Stream Energy is ready for the future—no matter the weather over the Texas sky.