Electric Utility Board Votes In Favor of LP&L to Retail Electric Competition
Pending a final vote by City Council, customers may have the power to choose their electric provider by late 2023
(Lubbock, Texas) – Today, the Electric Utility Board voted in favor of transitioning Lubbock Power & Light (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.
“The return to competition has been on everyone’s minds for a long time, and I’m proud of LP&L staff and employees for putting the utility in a unique position to pursue historic change for our customers,” said David McCalla, Director of Electric Utilities. “LP&L will continue to serve our community with a renewed focus on ensuring reliable power now and well into the future.”
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.
“The Electric Utility Board vote comes after months of discussion and careful consideration,” said Dan Odom, Electric Utility Board Chairman. “At the end of the day, joining the competitive electric market in Texas gives Lubbock citizens more options and control over how to best meet the energy needs of their homes and businesses.”
For more information about the transition to competition, visit lpandl.com/retail-competition.
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