The document provides an update on the Texas electric industry. It discusses how unusually cold winter weather led to higher electricity usage and potentially increased electric bills for customers. It also notes that the Sharyland Utilities service area has opened to retail electric competition, allowing customers to choose electric providers. Transmission and distribution utility issues are also mentioned.

1. Update
on
the
Texas
Electric
Industry
Legisla)ve
Staff
Briefing
March
20,
2014
Legislative advertising paid for by: John W. Fainter, Jr. • President and CEO Association of Electric Companies of Texas, Inc.
1005 Congress, Suite 600 • Austin, TX 78701 • phone 512-474-6725 • fax 512-474-9670 • www.aect.net

2. 2
AECT
Principles
•
AECT
is
an
advocacy
group
composed
of
member
companies
commiHed
to:
-­‐
Ensuring
a
modern,
reliable
infrastructure
for
the
supply
&
delivery
of
electricity.
-­‐
Suppor)ng
efficient
compe))ve
markets
that
are
fair
to
customers
and
market
par)cipants.
-­‐
Suppor)ng
consistent
and
predictable
oversight
and
regula)on
that
will
promote
investment
and
ensure
the
stability
of
Texas’
electric
industry.
-­‐
Promo)ng
an
economically
strong
and
environmentally
healthy
future
for
Texas,
including
conserva)on
and
efficient
use
of
available
resources.
•
AECT
member
companies
remain
dedicated
to
providing
Texas
customers
with
reliable
service
and
are
commiHed
to
the
highest
standards
of
integrity.
The
Associa+on
of
Electric
Companies
of
Texas,
Inc.
(AECT)
is
a
trade
organiza+on
of
investor-­‐owned
electric
companies
in
Texas.
Organized
in
1978,
AECT
provides
a
forum
for
member
company
representa+ves
to
exchange
informa+on
about
public
policy,
and
to
communicate
with
government
officials
and
the
public.
For
more
informa+on,
visit
www.aect.net.

3. 3
AECT
Companies
Within
ERCOT
Transmission
and
Distribu)on
U)li)es
Retail
Electric
Providers
Genera)on
Companies
Total ERCOT
Capacity:
>74,000 MW

4. 4
AECT
Companies
Outside
of
ERCOT
Western
Electricity
Coordina)ng
Council
(WECC)
Southwest
Power
Pool
(SPP)
Midcon)nent
Independent
System
Operator
(MISO)

5. 5
Market
Update
Winter
Weather
Causes
Higher
Usage
Sharyland
Moves
to
Compe))on
TDU
Issues

6. 6
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15
Daily Low Temperature (Austin) 11/1/13 - 3/15/14 - Compared With
Average
Average 13-14
December JanuaryNovember February March
Cold
Texas
Weather
Has
Con)nued
into
March
Source: Weather Underground
Two
out
of
every
three
days
below
historical
average

7. 7
Unusually
Cold
Winter
Temperatures
Mean
Higher
Electricity
Use
• ERCOT
net
system
demand
met
new
monthly
record
peaks
in
October,
November
and
December
last
year
• ERCOT
set
a
new
winter
peak
demand
record
of
57,277
MW
on
January
7
• ERCOT
set
a
new
monthly
peak
demand
record
for
March
of
54,549
MW
–
more
than
11,500
MW
higher
than
the
previous
record
set
in
March
2002
– By
this
)me
of
year,
many
power
plants
are
undergoing
necessary
maintenance,
since
it’s
normally
the
)me
of
lowest
demand
in
Texas
• Extended
cold
weather
affects
Texans
more
than
most:
about
half
of
Texas
households
use
electricity
for
hea)ng,
compared
with
34%
na)onwide
– Electric
heaters
use
three
)mes
as
much
energy
as
air
condi)oners
• Download
the
ERCOT
app
for
iPhone
and
Android
to
receive
ERCOT
weather
alerts
and
calls
for
conservaAon

8. 8
Low
Electric
Rates
x
High
Usage
=
Increased
Bills
• The
largest
por)on
of
customers’
electric
bills
are
calculated
based
on
the
price
of
electricity
and
the
amount
consumed,
so
even
though
generally
electric
prices
have
not
risen
over
the
past
year,
customers
may
s)ll
see
increased
electric
bills
due
to
higher
consump)on.
• The
prices
shown
above
are
illustra)ve.
The
actual
bill
will
depend
on
the
customer’s
electric
rate
and
actual
monthly
usage.
Electric
Rate
10.5¢/kWh
Monthly
Electric
Usage
1,200
kWh
Monthly
Electric
Bill
$126.00
Average
of
all
offers
in
the
market
in
February
Higher-­‐than-­‐normal
February
electric
usage

9. 9
Market
Update
Winter
Weather
Causes
Higher
Usage
Sharyland
Moves
to
Compe))on
TDU
Issues

10. 10"
Sharyland
U)li)es
Service
Area
Open
to
Compe))on
Customers
in
the
Brady,
Celeste,
Colorado
City,
and
Stanton
service
areas
of
Sharyland
U)li)es
are
now
able
to
shop
for
electric
services
from
compe))ve
REPs.
Sharyland
Customers
in
McAllen
are
not
affected
by
the
transi)on,
as
they
were
already
part
of
the
compe))ve
market

11. 11"
Shopping
for
Electricity
in
the
Sharyland
U)li)es
Service
Territory
• The
move
to
electric
compe))on
provides
electric
customers
the
opportunity
to
shop
for
electric
plans
via
REP
websites
or
the
PUC's
Power
to
Choose
website.
• The
compe))ve
market
offers
consumers
a
choice
of
a
variety
of
service
op)ons
from
numerous
retail
electric
providers.
Retail
compe))on
has
given
consumers
the
ability
to
choose
from
innova)ve
specialty
plans
that
meet
their
needs
—
including
green
power,
)me-­‐of-­‐use
rates,
and
other
promo)ons
and
incen)ves.
• Further,
certain
Sharyland
customers
will
be
able
to
qualify
for
benefits
that
are
available
in
compe))ve
areas—for
example,
the
LITE-­‐UP
Texas
program
offers
assistance
with
electric
bills
to
qualified
low-­‐income
customers
living
in
Texas'
compe))ve
areas.

12. 12
Market
Update
Winter
Weather
Causes
Higher
Usage
Sharyland
Moves
to
Compe))on
TDU
Issues

13. 13"
Compe))ve
Renewable
Energy
Zones
Lines
Completed
• In
December
2013,
ERCOT
reported
the
comple)on
of
the
CREZ
build-­‐out
• ERCOT
is
expected
to
have
over
16,500
MW
of
wind
power
installed
by
the
end
of
2016
CREZ
Lines
Completed

14. 14"
Advanced
Meter
Opt-­‐Out
Cases
at
the
PUC
• The
PUC’s
rule
allowing
customers
to
opt-­‐out
of
advanced
metering
service
was
adopted
on
August
9,
2013.
– AEP
Texas,
CenterPoint
Energy,
Oncor
and
Texas-­‐New
Mexico
Power
Company
have
filed
compliance
tariffs
outlining
proposed
costs
for
non-­‐standard
metering
service
and
ongoing
service.
• Based
on
typical
procedural
schedules,
it
is
expected
that
the
opt-­‐
out
process
will
begin
this
summer.
– Each
TDU’s
tariff
is
undergoing
a
contested
case
hearing
at
the
PUC.
– 45
days
ajer
adop)on
of
tariffs,
customers
who
have
requested
to
remain
without
an
advanced
meter
will
receive
a
no)ce
of
costs
and
instruc)ons
for
op)ng
out.
They
must
give
no)ce
and
provide
payment
within
60
days
of
no)ce.
– Customers
who
choose
to
replace
their
advanced
meter
in
the
future
will
pay
the
up-­‐front
costs
and
have
a
meter
installed
within
30
days.

15. 15"
Physical
Security
of
Electric
Grids
• While
electric
u)li)es
and
regulators
cannot
publicize
their
individual
and
collec)ve
security
ac)vi)es,
all
recognize
that
maintaining
the
physical
security
of
the
electric
grid
is
of
paramount
importance.
• Maintaining
the
physical
security
of
substa)ons,
transformers
and
other
assets
keeps
the
power
flowing
to
the
neighborhoods
and
businesses
who’ve
come
to
expect
a
high
level
of
electric
reliability
in
Texas.
• U)li)es
par)cipate
in
industry
groups
and
discussions
with
regulators
to
remain
current
on
emerging
threats
and
mi)ga)ng
techniques.
– These
groups
include,
but
are
not
limited
to:
the
US
Cyber
Emergency
Response
Team,
the
Na)onal
Electric
Sector
Cyber
Security
Organiza)on,
the
Department
of
Homeland
Security,
the
US
Nuclear
Regulatory
Commission
and
NERC.
– U)li)es
also
apply
the
knowledge
gained
by
con)nuing
to
invest
in
technology,
processes
and
services
to
detect,
mi)gate
and
protect
our
physical
and
cyber
assets.
These
investments
include
upgrades
to
network
architecture,
regular
intrusion
detec)on
monitoring
and
compliance
with
emerging
industry
regula)on.

16. 16"
Geomagne)c
Disturbances
and
Electric
Grids
• A
geomagne)c
disturbance
(GMD),
such
as
a
solar
flare,
can
affect
electric
systems,
typically
in
the
far
northern
or
southern
hemisphere.
• GMDs
have
never
caused
a
blackout
of
U.S.
power
systems,
though
they
may
have
contributed
to
isolated
outages.
• NERC
has
developed
and
con)nues
to
develop
reliability
standards
to
mi)gate
the
risks
of
GMDs.

17. 17"
Electromagne)c
Pulses
and
Electric
Grids
• Some
have
recently
cited
concern
about
the
poten)al
for
the
U.S.
power
grid
to
be
harmed
by
an
Electromagne)c
Pulse
(EMP)
aHack.
– An
electric
grid
saboteur
would
have
to
either
use
a
portable
EMP
emimng
device
located
in
close
proximity
to
electrical
equipment
or
detonate
a
nuclear
bomb.
• There
is
not
a
clear
consensus
regarding
the
likelihood
and
impact
of
man-­‐made
EMP
threats
to
power
grids.
– Protec)ng
against
the
smaller,
portable
variety
is
part
of
electric
companies’
broader
security
ac)vi)es.
– A
nuclear
detona)on
would
have
other
severe
impacts
unrelated
to
EMP,
and
its
EMP
impacts
could
affect
all
electrical
systems.

18. 18"
Emergency
Preparedness
Throughout
Texas
• Texas
is
prone
to
a
wide
array
of
inclement
weather.
The
state
faces
thunderstorms
with
high
winds,
tornadoes
and,
as
seen
recently,
ice
storms.
• Transmission
and
distribu)on
u)li)es
in
each
part
of
the
state
work
to
ensure
that
the
power
grid
func)ons
as
normally
as
possible.
• Each
u)lity
maintains
emergency
preparedness
plans
to
mi)gate
impacts
from
the
most
common
inclement
weather,
while
maintaining
crisis
response
teams
to
quickly
respond
to
these
emergencies
and,
if
necessary,
emergencies
in
other
parts
of
the
state
or
country.
• U)li)es
perform
reviews
ajer
actual
ac)va)ons
of
their
emergency
plans
and
make
revisions
based
on
lessons
learned
in
order
to
beHer
prepare
for
future
emergency
events.

19. 19"
Mutual
Assistance
Groups
Texas
Mutual
Assistance
Group
Midwest
Mutual
Assistance
Group
Members
AEP
CLECO
CenterPoint
Energy
Entergy
Texas
Mississippi
Power
Company
Oklahoma
Gas
and
Electric
Company
Oncor
Electric
Delivery
Texas-­‐New
Mexico
Power
Company
Members
AEP
CenterPoint
Energy
Empire
District
Electric
Company
Entergy
Texas
Exelon
Kansas
City
Power
&
Light
Co.
LG&E
Energy
Oncor
Electric
Delivery
We
Energies
Xcel
Energy
Inc.
Southeastern
Electric
Exchange
Texas
Members
CenterPoint
Energy
Entergy
Texas
Texas-­‐New
Mexico
Power
Company

20. 20"
Emergency
Opera)ng/Restora)on
Plans:
U)li)es
Prepare
Year-­‐Round
• The
goal
of
a
u)lity’s
emergency
plan
is
to
restore
service
to
its
customers
–
safely,
quickly
and
efficiently.
• In
addi)on
to
linemen
and
local
contractors,
an
emergency
plan
typically
includes
virtually
every
company
employee
-­‐
even
those
who
do
not
tradi)onally
work
in
the
field.
• Through
electric
u)lity
mutual
assistance
programs,
most
u)li)es
have
access
to
thousands
of
linemen
and
tree
trimmers
from
around
the
country.
• The
u)li)es
also
work
to
ensure
access
to
lodging,
fuel,
food,
supplies
and
equipment.

21. 21"
Basic
Priority
Restora)on
In
compeAAve
areas
of
the
state,
restoraAon
of
power
is
not
affected
by
a
customer’s
choice
of
retail
electric
provider.
A
typical
plan
consists
of
four
phases
of
restoraAon:
• Service
to
facili)es
vital
to
safety,
health
and
welfare,
such
as
hospitals,
water
treatment
plants
and
public
service
facili)es.
• Service
to
customers
whose
power
is
out
due
to
damage
to
major
power
lines,
which
serve
thousands
of
customers.
• Service
to
customers
whose
power
outage
was
caused
by
damage
to
smaller
sec)ons
of
power
lines
serving
hundreds
of
customers.
• Service
to
customers
who
have
outages
caused
by
damage
to
equipment
that
typically
serves
less
than
ten
customers.
The
)meline
for
restora)on
is
heavily
dependent
on
the
severity
of
the
weather
event
and
the
extent
of
the
areas
affected.
An
extremely
severe
storm
can
result
in
outages
las)ng
a
number
of
weeks.

22. 22"
Web: AECT.net
Twitter: twitter.com/AECTnet
Facebook: AECT Advocacy
Email: info@aect.net