Lubbock City Council Vote Solidifies Lubbock Power & Light’s Return to Retail Electric Competition
This marks the first time a municipally owned utility voluntarily deregulated since Texas Senate Bill 7 first became law in 1999
Today, Lubbock City Council voted in favor of transitioning Lubbock Power & Light (LP&L) to the competitive electric market in Texas. The City Council vote was the last step required for LP&L to begin necessary work to move to retail competition following the Electric Utility Board’s vote last week. LP&L hopes to transition to competitive retail electric service in late 2023 pending state regulatory approval to move all remaining customers into the ERCOT market.
Under the future competition model, LP&L will no longer serve as the city-owned electricity provider. Instead, customers can “shop” from multiple retail electric providers, each offering their own plans, pricing and contract terms. The retail providers will be responsible for buying and selling power, while LP&L will continue to own and maintain all transmission and distribution infrastructure, such as poles and lines.
“After years of careful preparation and planning, we can turn to citizens and officially say–we heard you loud and clear, and electric competition is on the way.” said Mayor Dan Pope. “All of the work up to this point and going forward not only gives customers control over their energy choices, it ensures a diverse electricity supply well into the future as our city and energy needs continue to grow. I could not be more proud to be a part of this historic decision.”
Deregulation in Texas
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.
In competitive markets such as Midland and Dallas, customers can visit the state’s official website, PowerToChoose.org, to review and compare plans in their area and select a plan of their choice. Customers can switch providers, depending on their contract, if another offers a more affordable or appealing option.
A Tale of Two Systems
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).
The Road Ahead
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. 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.
“Our work is far from done,” said David McCalla, Director of Electric Utilities. “LP&L and our partners have a lot to do in order to make sure the transition is as smooth as possible, but we’re hitting the ground running. We look forward to serving our community with a renewed focus on ensuring reliable power now and well into the future.”