Garland Power & Light Launches Consumer Education Effort, Explains Decision to Opt Out of Electric Retail Deregulation
While neighboring electrical utilities will soon be required to permit retail competition for their customers, things will remain "business as usual" for customers of Garland Power & Light. The Garland City Council recently announced its decision to not presently participate in retail electric deregulation.
Owned and operated by the City of Garland, GP&L is one of 73 municipal utilities in Texas, which with the state's 77 electric cooperatives have been granted the option of choosing whether to participate in retail electric deregulation under new state laws. At present all have decided to opt out of the deregulated market system. The Deregulation Law and related regulations go into effect Jan. 1, 2002.
GP&L has launched a public education effort to help customers and employees understand deregulation and why the City Council's decision is the right choice at this time.
"GP&L will not participate in deregulation in order to protect the interests of its customers," said Jim Harder, director, electric utilities for the City of Garland. "Frankly, we believe a deregulated retail electric market would provide no advantage to Garland residents. We are confident in the strength of our operations, and will serve our community's needs far better than a network of third-party energy providers," he continued.
Though the city reserves the option of opting into a deregulated retail market in the future, such a decision holds some pitfalls. "If Garland opted-in to a retail market, the decision would be irreversible," cautions Harder. Furthermore, "In so doing, we would lose control over our ability to control external factors influencing rate impacts for our customers. Soaring natural gas prices, summer temperatures, transformer constraints and other factors could cause rates to soar."
GP&L will remain the electrical provider to all of its current customers, comprised of nearly all Garland residents and businesses. Meanwhile, neighboring electricity consumers -- including a small percentage of Garland residents -- receive electrical service from an investor-owned utility. These customers will be able to choose among competing retail electrical providers. This disparity, along with heavy news coverage and advertising by "new" electrical providers could create confusion among GP&L customers. The public education effort is designed to counteract these mixed messages with correct information provided directly by GP&L.
A letter and brochure has been mailed to all GP&L customers. A special manual and training have been designed for employees to help them both understand GP&L's decision and be able to explain it to customers. Key points and supporting information stressed in all materials include: GP&L is committed to providing reliable electricity service to our customer-owners, and devotes the resources needed to upgrade, expand and renovate the electrical distribution system to meet demand, as well as to maintain it for high reliability. GP&L rates are designed to offset the cost of providing services, rather than returning profits to investors. GP&L can keep our rates low by remaining community-owned.
When deregulation is in effect, GP&L will ensure rates are competitive with those in retail markets. Deregulation has had mixed results in other states. It is in the best interests of GP&L customers to review its impact before committing to an irrevocable decision. The Council's decision was made after Council-members and city staff members conducted years of research and worked with other organizations closely tied to the industry's deregulation, including the Public Utility Commission, the Texas Public Power Association, and the Texas Municipal Power Association.
