Texans use food-style labels to buy power

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http://www.vny.com/cf/News/upidetail.cfm?QID=187677 Monday, 21 May 2001 20:38 (ET)

Texans use food-style labels to buy power

AUSTIN, Texas May 21 (UPI) -- Starting June 1 Texans will soon be shopping for electricity the same way they shop for food -- by comparing prices and product information on so-called "electricity facts labels."

Gone from the Lone Star State are electric utility monopolies. A 1999 state law that restructured the Texas electricity industry allows most Texans to choose a retail electric provider-the company that will provide their electricity.

The new electricity facts labels, mandated by the Texas Public Utility Commission (PUC) provide information on prices, contract terms, generation sources, and emissions in a standardized format similar to FDA-mandated food labels.

"The electricity facts label will have much of the information customers need to make a decision that best meets their needs," PUC Commissioner Brett Perlman said in a prepared statement from Austin.

With the new labels, the Texas PUC claims customers will know well ahead of time key facts about the power they buy. The labels provide pricing information in cents per kilowatt hour at various usage levels; type of fuel the utility uses to generate power (coal, natural gas, nuclear energy); and, for the environmentally conscious, air emissions attributable to the utility.

Texas lawmakers hope a new wave of competition will lower electric rates and speed the development of everything from new power plants to alternative energy. The threat of rising prices has Texas customers lining up to start the new plan, which begins June 1.

"There has been tremendous interest in the pilot program from business customers throughout Texas because they recognize they can save money by switching electric providers," Perlman said. "With the hot summer months on the way, residential customers should begin comparing offers from retail electric providers serving their area to see if they can save money on electricity, and the electricity facts label should help them make an 'apples-to-apples' comparison."

"This electric label program is clearly a positive next step to simplify the process of utility choice for consumers," said Brian Barrett, a retail energy consultant for Houston-based Skipping Stone Consultants Inc. "But it doesn't provide enough information for consumers to understand choice."

Barrett, who specializes in deregulated energy markets such as the one taking shape in Texas, told United Press International the electricity facts labels are an attempt to reveal hidden costs and make everything about electricity consumption comparable across a number of potential providers. He also believes the program is unique to Texas.

"California has a similar label, but it only covers how the power is generated, and whether the generation source is truly green," Barrett said. To my knowledge, the California labels do not cover cost." Consumers in Texas are generally fearful of the newly deregulated utility system, Barrett said. "They have one lingering question: How will Texas be different from California?" Barrett provided UPI his answer. "No question, it will different. We have a good balance of supply and demand going into this. Where California was very unfriendly to new construction of power plants, Texas has been just the opposite. The state has truly encouraged the construction of many new plants, so we don't have the supply imbalance that plagues California."

Barrett said the Bush administration is simply following the Texas script: George Bush as Texas governor oversaw a healthy energy industry that George Bush as president wants to repeat nationally. California, Barrett said, has the utility business all wrong.

"What Grey Davis is doing there is completely absurd," Barrett said. "He's threatening to essentially take over the utility industry. To me, his actions beg the larger question: What in world is California doing? At least here in Texas, I think we are on the right track."

(Reported by UPI Science Correspondent Mike Martin in Washington.)

Copyright 2001 by United Press International.

-- Swissrose (cellier3@mindspring.com), May 21, 2001

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