Why the Texas Restructuring Model is Different

• Although Texas and California have similarly sized electric grids and similar growth in power demand, Texas has put more than eight times the capacity on line between 1996 and 1999 than California has added.
  
• Texas has lead-time of two - three years to construct new power plants, while California's lead time is approximately seven years. Since 1995, 47 new power plants have been built or are being built in Texas, representing one-fourth of all power plants being built in the nation. California has built only two power plants since 1995.
  
• New plant construction will allow power generators to easily meet the needs of residential and non-residential power users in out state.
  
• Texas imports less than one percent of its power during peak power demand, compared to California, which imports at least 25 percent of its load during peak demand.
  
• Long-term wholesale market contracts in Texas shield customers from price volatility. In Texas, power generators and Retail Electric Providers (REPs) will be able to negotiate wholesale power purchases for the lowest price, which will benefit customers.
  
• In California, spot purchases have left utilities and customers vulnerable to price spikes. California rules regarding bulk power purchases mean that utilities, and therefore customers, will often pay an unnaturally high price. The California power system also encouraged price spikes during peak demand periods.
  
• Texas enacted strong measures to protect customers during the transition to a fully competitive retail electric market. These measures will keep a lid on electric rates so Texas electric customers won't see their electric bill double or triple, as happened last summer in the San Diego area.