Lubbock one step further in joining competitive electric retail

Lubbock one step further in joining competitive electric retail marketplace

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LUBBOCK, Texas -

The possibility of joining the Electric Reliability Council of Texas is becoming more of a possibility, with Lubbock City Council taking the next step.

Council and the Electric Utility Board members vote unanimously to approve a resolution that expresses "the intent to provide customer choice to the Lubbock Power & Light load that is anticipated to be interconnected with ERCOT."

A move to ERCOT would allow Lubbock power users to choose which electric provider they would want to use, giving them options.

Now flashback to the time when Lubbock residents already had customer choice.

"For 93 years, the citizens of Lubbock enjoyed a form of competition," LP&L CFO Andy Burcham said. "It's not exactly the form that we're looking to move towards through this study at least of competition. But, there was alley-by-alley lines competition for many years since 1917."

This was scrapped in 2010 after Lubbock bought the existing power grid, making LP&L the sole provider, and giving it a monopoly.

"I believe that the citizens of Lubbock want to have access to a competitive environment once again," Councilwoman Karen Gibson said. "This resolution begins that process."

According to a written testimony by Mayor Dan Pope, the earlier method of retail competition wasn't efficient and he's advocating the city bring it back in a different form -- by joining ERCOT.

"The idea for our consumers is choice and better rates, and we can accomplish both of those with the move to ERCOT," Pope said.

He said he wants you to have the right to freely shop the Texas retail electric market for a provider who best suits your needs. In response to whether ERCOT would raise rates, Pope said the ERCOT marketplace is "a much more competitive market than where we are today."

He continued, "as a Texan, I think it makes good sense. I think it's good for business. I think it's good for our residents, our individuals. I don't see a downside to an entry into ERCOT." 

"This resolution enables us to look deeper into it and also give us an opportunity to see how a competitive market would either benefit or not benefit our citizen," said James Conwright, Electric Utility Board secretary.

The approved resolution is directed at members of the Public Utility Commission, the regulatory agency which will soon vote whether to allow LP&L's bid to join ERCOT.

"I think we're confident that the ultimate decision will be affirmative for the city of Lubbock. I think we're very confident in that position," said Greg Taylor, Electric Utility Board chairman.

Here's where it all gets a little tricky. Due to existing legalities and contracts, LP&L is only looking for a portion of the utility to join ERCOT.

"We have a contract that is a partial requirements contract with Southwestern Public Service that starts in 2021 and it covers roughly 30 percent of our system," LP&L spokesman Matt Rose said.

That means roughly 30 percent of Lubbock power users are ineligible to connect to the ERCOT power grid. This is something Rose said has been at the forefront and publicly disclosed since this was pitched back in 2015.

"Come 2021, if we want to make that move over to the competitive market, how do these two systems correspond? What does it look like in the city of Lubbock if there is a portion that is not immediately available for competition but has to lag behind for some period of time?"

Former Electric Utility Board member Charles Dunn tweeted a frustrated response questioning the move to ERCOT.

He tweeted, "Electric Utility Board of LP&L passes resolution of intent to pursue a competitive market for 70% of the city. No questions were asked of either the Director of Utilities or Assist. as to how it will work with 30% having no choice. Who chooses the 30%?"

Rose understood the frustration to this topic, but does not have an answer at this time.

"We don't have the answers to any of these things today because they have not been very closely studied," Rose said.

City council gave LP&L the green light to complete a study that analyzes the proposed move and how and if it'll work considering the contractual obligations, and the portion of the city that won't connect to the ERCOT grid.

Dunn tweeted again after the council meeting and said, "[I] never thought I would live in a city in which the mayor would vote to provide economic benefits in the form of competitive electricity to 70% of the City while leaving the remaining 30 percent without those same benefits."

Pope clarified that the 1-2 yearlong study won't happen until the move to ERCOT happens, which is based on the Public Utility Commission's opinion.

"We have to get into ERCOT before we even go down that road. So that's a parallel effort and something we will down next week speaking to the Public Utility Commission about that very topic."

If Lubbock does join ERCOT, which is dependent on many factors, it wouldn't be until 2021. Customers will then eventually be able to select their own electric retail provider in the ERCOT marketplace through the website

Since LP&L will still be providing the infrastructure, customers will pay its base rate (30 percent) and the chosen provider's cost for electricity (70 percent).

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