QUESTION: I saw the February story in the News-Journal about how ongoing electric regulation in this area helped prevent the electricity disaster that occurred in much of the rest of the unregulated portions of the state, where people can choose their electric provider.
The story focused on SWEPCO and how competition has been delayed here for years because the company’s prices couldn’t be beat. I was curious — how do electric cooperatives factor into that picture in our area?
ANSWER: So, it would have been helpful if I had explained all of this in that original story, and I apologize for that.
I’m going to start with some background: The Southwest Power Pool, which manages the electric grid and wholesale power market for a group of utilities and transmission companies in 17 states, including AEP-Southwestern Electric Power Co. SWEPCO was known as Southwestern Gas and Electric Co. when it was one of those 11 original members of the Southwester Power Pool when it was created in 1941.
The Electric Reliability Council of Texas, the grid operator that experienced so much trouble during the winter storm, was created in 1970.
Before both of those organizations were created, Congress adopted the Rural Electrification Act of 1936.
“The REA was created to bring electricity to farms. In 1936, nearly 90 percent of farms lacked electric power because the costs to get electricity to rural areas were prohibitive,” said information I found online from the U.S. Department of Agriculture Rural Utilities Service. “REA funding and the hard work of Rural Electric Cooperatives transformed agriculture and life in rural America into productivity and prosperity. Thanks to hard work and REA loans, by 1950 close to 80 percent of U.S. farms had electric service. Since then, generations have heard the stories about ‘the night the lights came on,’ a significant date for farm families....”
While there was a state law passed prohibiting competition in this area of the state until certain parameters are met that include comparisons to SWEPCO prices, the Public Utility Regulatory Act gives electric cooperatives the right to enter into the competitive market — think ERCOT — by vote of the board of directors and without mentioning any geographic restrictions such as the one that restricts competition in Longview and much of the surrounding area.
However, I spoke to Rob Walker, general manager of Upshur Rural Electric Cooperative, and it just wouldn’t be that simple for electric cooperatives in the Southwest Power Pool to join the competitive market.
Upshur Rural, by the way, was created in 1937. Today, it serves more than 46,000 meters in 10 counties.
Walker said Upshur Rural and five other East Texas rural electric cooperatives formed the Northeast Texas Electric Cooperative, a generation and transmission company based in Longview. Information from the organization’s website identified the other participating cooperatives as Panola-Harrison County, Bowie-Cass Electric, Deep East Texas Electric, Wood County Electric and Rusk County Electric.
Walker said the electricity mix is 20% renewables, including wind energy generated in Oklahoma and hydroelectric power from the Red River. Other energy sources include a gas-power plant the cooperative owns in Harrison County, contracts with SWEPCO and other providers and through ownership of a portion of the Pirkey Power Plant.
Walker said the state has said that people in the ERCOT area can choose their electric provider, but Upshur Rural (or any electric cooperative in the unregulated area) would have to build facilities to tie into ERCOT and have to receive permission to do so. There hasn’t been a big push from Upshur Rural members to enter the competitive market, although Walker said people do sometimes bring it up.
He noted that this area of the state avoided many of the problems experienced by the ERCOT area during the winter storm.
“We avoided the rolling blackout requirement,” Walker said. “We were fortunate that the Southwest Power Pool was able to balance generation and load throughout that extreme event.”
He noted that the Southwest Power Pool requires its members to show that they have an asset under their control to use during peaks.
”And that’s kind of the difference in the market when you have these extreme events,” Walker said.
Also, I’ll note that I found one electric cooperative in the state that has opted to enter into the competitive market — the Nueces Electric Cooperative.