The Electric Utility Board for Texas public power utility Lubbock Power & Light (LP&L) on Feb. 15 voted in favor of transitioning LP&L to the competitive electric market in Texas, paving the way for Lubbock to once again have retail electric competition.
The Electric Utility Board vote was the first in a two-step approval process required for LP&L to begin the necessary work to move to retail competition.
Should the City Council also vote in favor at next week’s regularly scheduled meeting, LP&L hopes to transition to competitive retail electric service in late 2023. This would mark the first time a municipally owned utility voluntarily deregulated since Texas Senate Bill 7 first became law in 1999.
Under retail electric competition, LP&L would no longer serve as the city-owned electricity provider. Instead, customers could “shop” from multiple retail electric providers, each offering their own plans, pricing and contract terms. The retail providers would be responsible for buying and selling power, while LP&L would continue to own and maintain all transmission and distribution infrastructure, such as poles and lines.
In 1999, Texas legislators signed Senate Bill 7 into law, aimed at allowing retail electric providers to compete for customers and thereby provide Texas residents with the best possible electric rates and plans to meet their unique needs.
Lubbock residents once had a version of retail electric competition in which customers could choose between two electric providers -- LP&L and SPS. In 2010, the City of Lubbock purchased distribution assets from SPS to become the sole electric provider for the majority of Lubbock residents.
The two systems were evenly distributed throughout the city since both companies served customers in nearly every neighborhood, referred to as alley-by-alley competition. Since the time of the sale, LP&L managed both systems, but they were not combined. LP&L took the first step to combine the systems in May 2021, migrating 70% (approximately 83,000 customers) of its system to the Electric Reliability Council of Texas (ERCOT).
LP&L hopes to migrate the remaining 30% (about 24,000 customers) to ERCOT in summer 2023, to get all LP&L customers in the same grid.
LP&L worked closely with the Electric Utility Board and Lubbock City Council to develop a responsible path to retail electric competition, it noted.
Rather than offer customer choice to just 70% of LP&L’s customer base currently in the ERCOT system, the current plan is to transition in late 2023, once all customers can participate.