Texas Electricity Generation Surging

New Plants to Provide Summer Cushion of 20 Percent



Terry Hadley 512-936-7135

Pager: 512-322-1457

Austin, TX, February 1, 2001 -- The continued completion and construction of new generation plants in Texas will create an electricity supply this summer 23 percent greater than peak firm demand.

"With all these new power plants, Texas is a buyer's market," said Pat Wood, III, chairman of the Public Utility Commission (PUC). "It's great news for electric customers as we open our markets to retail competition."

Retail electric competition begins Jan. 1, 2002 for customers of investor-owned utilities in Texas. Pilot projects begin June 1, 2001. Customers will be getting more information in their next electric bill. Municipal utilities and electric cooperatives have the option of participating in retail competition.

The latest information compiled by the PUC shows new electricity sources popping up all around the state. It's happening as the Texas economy continues to grow, and the demand for electricity keeps rising three to four percent a year.

Since open transmission access and wholesale competition began in Texas in 1995, nearly 50 new plants are either completed or under construction. More than 25 additional generation projects have been announced. The new plants will add more than 21,000 Megawatts (MW) of capacity by the summer of 2002, enough to power nearly five million Texas homes on the hottest summer day.

Texans also will benefit from a diversified power supply. About 46 percent of the electricity in Texas come from natural gas-fired plants. Coal and Texas lignite supply about 41 percent of the fuel mix, with 13 percent coming from nuclear plants. The rapidly growing renewable energy sector currently supplies less than one percent of the state's electricity. Already more than 20 wind projects have been proposed in West Texas and several are under construction.

Statewide, firm electric demand in Texas is expected to reach 67,000 MW this summer, but total generation capacity should exceed 83,000 MW for a 23 percent reserve margin.

Within the Electric Reliability Council of Texas Inc. (ERCOT), a bulk electric system serving approximately 85 percent of the Texas' electric load, firm peak demand is projected to reach almost 56,500 MW this summer, while installed capacity will top 70,700 MW.

ERCOT's main function is maintaining a reliable, efficiently transmission system. ERCOT now has many major transmission projects underway to relieve existing constraints and connect new power plants to the system.

More information on the Texas electricity situation is available on the PUC Web site at http://www.puc.state.tx.us/electric/reports/qtlyercot/2001/TXELECUPDATE.pdf .

The PUC encourages competition and customer choice while ensuring electric and telephone operations, services and rates are fair and reasonable.