How does Garland Power & Light view deregulation?
We believe it would be in the best interest of our customers to review the impact of deregulation on Texas consumers before committing to an irrevocable decision. Deregulation has had mixed results in states where it has already been implemented. In some states, deregulation has resulted in higher costs and poor reliability. In reality, every electric utility in Texas, whether investor-owned, a co-op, or municipally-owned, must be competitive when deregulation begins, regardless of whether they opt-in or opt-out. Garland Power & Light has been preparing for deregulation, and will be immediately competitive with other energy suppliers.

Why is Garland Power & Light opting-out of retail competition?
Garland Power & Light already offers reliable and competitively priced electricity to our customer owners, and when deregulation is in effect, we will ensure that our rates remain competitive. To date, none of the 77 electric cooperatives or 73 municipally-owned electric utilities in the state has voted to opt-in to deregulation. We believe a deregulated retail electric market will provide no advantage to Garland residents. We are confident in the strength of our competitive operations, and will serve our community's needs far better than a network of third-party energy providers.

Would I save money in a deregulated market?
Deregulation in other states has not always produced lower rates. In California, rates are dramatically higher than before deregulation began. Los Angeles Water and Power, a municipally-owned utility, has yet to opt-in to deregulation and has among the lowest rates and highest reliability in California. In Pennsylvania, a state that had enjoyed some of the best results to date with deregulation, energy providers are leaving the state and returning customers to their original electric utilities because they cannot provide lower prices. Nationwide, less than 2% of customers in deregulated states have chosen an alternate energy provider.

California: Can it happen in Texas?
The power shortages in California are the results of several factors: the major problem is California's electrical industry has failed to build enough electrical generation capacity to meet the state's growth, and has consequently been forced to import electricity. Now, out-of-state providers cannot spare enough power to meet California's needs as well as their own. Meanwhile, soaring fuel costs have jeopardized the state's utility company's ability to pay for the electricity at such high prices. At Garland Power & Light, we are in an excellent position to remain competitive while providing reliable service. We are increasing our generation capacity and continuing to maintain and renovate our generating plants to provide a steady, adequate supply of electricity. We are continuing our efforts to invest in transmission and distribution infrastructure, and have made a long-term commitment to provide highly reliable power to our customers. We have been able to recover some of our operating costs by selling electrical generation to other utilities on the wholesale market.

I hear about pilot programs in the media. Can I participate?
Electric cooperatives and municipally-owned electric utilities will not participate in the pilot unless they have first opted-in to deregulation. As was referred to earlier, none of the electric cooperatives or municipally-owned electric utilities has voted to opt-in to electric deregulation. A deregulation pilot will begin June 1, 2001 in which up to 5% of investor-owned utility customers can begin participating in deregulation. The goal of the pilot program is to test systems and procedures to be used when deregulation begins on January 1, 2002.

I understand there is a surplus of electricity in Texas. Shouldn't this produce savings?
Currently, there are a number of new generating plants being built in Texas. Unfortunately, the statewide transmission system was built to support each utility's individual load, and was not originally intended to support a highly fluid marketplace. Very often, transmission bottlenecks limit the amount of power that can be delivered from one part of the state to another. This problem is particularly acute in the North Texas area. Natural gas prices have risen unexpectedly by as much as 400% since 1999. The current prices are projected to stay at double the 1999 prices for at least the next few years. Virtually all new power plants being built in Texas are powered by natural gas. Because of the natural gas prices, it will be difficult for these new plants to generate electricity at lower prices.

So, does that mean deregulation won't work in Texas?
Deregulation is a concept that has potential for benefits long-term. What remains to be seen is how long it will take for deregulation to produce those benefits. Our goal is to ensure that our customers receive the best possible value. Taking time to see how deregulation works will ensure that outcome.

What is the bottom line?
Deregulation has had mixed results throughout the United States. Wide ranges of market forces are responsible for the differing results. Whether or not deregulation in Texas will deliver benefits such as lower prices and more services will not be fully known until the new market structure has time to operate and mature.