American Electric Power Co. Inc. Tuesday recommended competition be delayed in parts of East Texas for 2 years.
The Columbus, Ohio, utility holding company said there is no infrastructure to support competition in the area, and the retail pilot project has not a single participant. Full competition in the electric industry in the state is scheduled to begin Jan.1, 2002.
AEP owns Southwestern Electric Power Co. (SWEPCO), which serves 162,000 customers in the region.
The Texas Office of Public Utility Counsel agreed competition should be delayed until the “essential organizations,” including an independent system operator, are in place to promote a competitive electricity market. OPUC said in a filing the region needs an independent organization to ensure the following: access to transmission and distribution systems for all buyers and sellers of electricity; reliability and adequacy of the regional electrical system; information about retail choice; and accurate accounting of electricity production and delivery.
The region under the Southwest Power Pool has none of these prerequisites for competition at this time, OPUC said.
SWEPCO operates within the Southwest Power Pool, which is not recognized as an independent control system operator by the Federal Regulatory Energy Commission. SPP is not a part of a FERC approved regional transmission organization.
With few exceptions, the rest of Texas is under the Electricity Reliability Council of Texas, an independent system operator not under FERC jurisdiction.
“Since there is no participation in a pilot project within SPP, it is impossible to judge if SPP is able to offer fair competition and reliable service on Jan. 1, 2002. An untested system is not ready for competition,” said OPUC.
But AEP and OPUC disagreed over whether consumer rates should change in SWEPCO’s territory. AEP said SWEPCO should continue charging base rates already in effect until 2003.
Since the region is not ready for competition, OPUC said the ratepayers should have the benefit of a full rate case. The public counsel noted customers in other utility service territories in Texas will have the benefit of a 6% rate reduction when competition begins next year.
AEP also requested the commission set milestones to concretely move towards competition in the region.