Welcome message from Matt Gallagher

You Gotta Have Money to Make Money

To follow up on an issue discussed several times before, the new rule created by the PUC regarding certification for all REPs has been approved. A key number in this decision is the amount of credit an REP must have in order to do business. That number is $500,000. This requirement can be met without this line of credit as long as the company holds an investment grade credit rating, a $100 million net worth with other financial requirements or a guarantee from a firm that fulfills those two. At the heart of these rules is the well being and protection of Texans. These rules will see to it that the risk of REPs going out of business as several did last summer, is far less likely to happen, thus protecting customers from being forced onto a POLR like so many unsuspecting people were this time last year.

The PUC Gets What Is Theirs

As the summer months approach, some of those REPs that were put out of business around this time last year are getting hit again. It was announced this week that National Power and Pre-Buy Electric are being asked to re-pay 3.69 million to the PUC. The reasons for these charges are primarily due to the fact that neither company informed the PUC whether they had repaid deposits to former customers, as well as not giving sufficient notice they would not be able to operate much longer. The deposit issue makes up an overwhelming majority of the fees owed. While these two were not the only REPs to go under last year, they are the only ones being charged at this point. The other defunct companies are currently being investigated to decide if anything is owed. These actions should serve as a deterrent to unqualified parties jumping into the electricity market.

PUC Protects Texans

The PUC makes one final adjustment before potentially finalizing pro-customer rules regarding POLRs. The new change would involve allocating a portion of the 500,000 dollar collateral required by POLRs, to be used for new customers who lost their deposits when their old REP went out of business. The first priority will be to those new POLR customers who are low-income and switched to a voluntary POLR. Secondary priority will be given to those low-income families switched onto a non-voluntary POLR. One benefit of this addition will be the protection for those customers who are at risk of losing money they can hardly afford to pay for a second deposit. Another perk is the incentive for REPs to join on as voluntary POLRs. This plan provides them with a little insurance for any new customer then may obtain through becoming a POLR.

Crossing the Line

T. Boone Pickens crosses a line to achieve his goal of green energy. Mr. Pickens, a loyal member of the Republican party crossed party lines to join forces with Senator Harry Reid of Nevada in bringing renewable energy to not only Texas, but to America. In a letter to President Obama, the two men, along with Center for American Progress CEO John Podesta, presented a clearer picture of what must happen and when in order for the idea of renewable energy sources to become a reality. Senator Reid has taken initial steps to assuring success in his home state by calling for the dedication of seventy-five percent of transmission lines to delivering green electricity. While some say this goal is unrealistic, they also concede it is not impossible and could simply be altered in the future to become more easily achieved.

Nodal Looks Up

After months of negative feedback and bleak forecasts for the impending Texas nodal electricity program, some good news and optimism was delivered. Members of the Texas PUC were provided some relief by new developments presented in their weekly meeting held this past Friday. According to PUC Chairman Barry Smitherman, "I'm very encouraged, more so now than I have been in a long time." With a clear timeline and budget in place, as well as news of streamlining in the management of the project, the realization of a completed nodal market was realized. As far as funding of the project is concerned, the PUC will continue its nodal transition fee of 16.9 cents/mWh through the end of May when a permanent fee will be established. To learn more about the nodal system and how it can affect you, please visit http://nodal.ercot.com/.

Leaving Wellinghoff Alone

As the hotter part of the year approaches Texas, it is hard not to think back on the chaos last year’s volatile market created. These were hardships felt more so in Texas due to the incredible heat, but this was a national occurrence as well. TO see to it that this summer goes as smoothly as possible, President Obama has nominated Jon Wellinghoff to stay on as FERC Chairman. He also will bring back Suedeen Kelly for a third term on the commission. This consistency in staff should help in preparedness as these were the people who experienced last summer’s events firsthand. "Chairman Wellinghoff recognizes the critical role wholesale competition plays in powering economic and environmental benefits," said EPSA CEO John Shelk. "This includes enabling the development of renewable energy and spurring innovation." This should speak volumes about what to expect in the future, especially for Texans living in a deregulated market.