For you the consumer, retail choice (a.k.a., retail access) means that the local utility no longer exists to serve as your sole supplier of electricity. Retail choice has enabled transparent changes to the Texas electricity market and new market structure and service options for consumers.

SB7 restructured both investor-owned utility companies (IOUs), such as Reliant and TXU and the corresponding customer-utility relationship that existed between you and the IOUs. For IOUs, SB7 mandated functional unbundling - a mandate that restructures traditional electric services (i.e., power supply, power delivery, and retail functions) into three separate entities:

• Power Generation Company (PGC) - any entity registered by the PUCT that 1) generates electricity for wholesale purposes; 2) does not own transmission or distribution facilities in Texas other than facilities that are essential for interconnection, not dedicated for public use, or excluded from the Public Utility Regulatory Act (PURA) definition of electric utility; and 3) does not have a certified service area.
  
• Retail Electricity Provider (REP) - a person that sells electricity to retail customers and that does not own or operate generation assets and is not an Aggregator.
  
• Transmission and Distribution Service Provider (TDSP) - the “poles and wires” company that owns assets that deliver electricity to the customer’s premise and whose rates are regulated by the PUCT.

To recap, The PGCs (power generators) and the REPs (retail electric functions such as billing, etc.) are competitive organizations with varying pricing, contract structures, and terms and conditions while the TDSPs (power delivery, the wires companies), such as CenterPoint Energy and Oncor, are the wire organizations whose prices and terms regulated by the Public Utility Commission of Texas (PUCT).

Our company, Power Procurement Specialists LLC, provides aggregation services in the Texas retail market. Simply stated, an aggregator is any PUCT registered entity that joins two or more customers together as a single purchasing unit. As an aggregator / consultant, we provide similar services to individual customers rather than a group of two or more customers. In this function, Power Procurement Specialists LLC serves as a buyer’s agent for customers and is not affiliated with a REP or seller’s agent representing a REP (See PUCT Substantive Rule §25.111). As your agent, we receive no upfront costs; our fee is built into the final agreement with the REP and the REP pays us.

Key Tariff Directives

• As a retail customer, you may encounter many different terms and concepts previously addressed primarily by regulatory and utility staff. The following key tariff directives are associated with the Texas retail market:
  
• Residential and Small and Medium Commercial Customers (up to 1000 kW) can choose not to default to the affiliate REP and accept what is known as the Price-To-Beat (PTB) Offer. As the starting point for Customer Choice, the PTB Offer (available until January 1, 2007) are essentially rates that on a bundled basis are 6% less than the affiliated electric utility’s corresponding average residential and small commercial rates in effect on January 1, 1999, adjusted for fuel rate adjustments. In other words, the PTB Offer is basically the customer’s old regulated rate less 6%. Note: The PTB Offer is not entirely fixed as the fuel rate component may be adjusted twice per calendar year. The Public Utility Commission of Texas (PUCT) website stores PTB tariffs and lists fuel filings submitted to date (http://www.puc.state.tx.us).
  
• Non-PTB customers (over 1000 kW) are not afforded default service to previously regulated tariffs. Such customers instead are charged market-based rates typically exceeding charges incurred under tariff regulation or within the competitive market.
  
• Customers participating in the market incur separate charges for power supply and delivery service. Power supply charges are market based. Delivery service charges are designed by your local TDSP and remain regulated by the PUCT (http://www.puc.state.tx.us).