Dec 28 - Victoria Advocate, Victoria, Texas

Homeowners might get cheaper electricity and cities might attract more business if municipalities are able to buy power in bulk and resell it.

But first cities would have to convince the Texas Legislature in 2009 to change the law and give municipalities that authority.

"Right now it's against the law for us to go into the utility business," Victoria Mayor Will Armstrong said. "Austin has got that authority and San Antonio has it, but we can't do that without a change in the law."

Gary Broz, Port Lavaca's city manager, said his city is working with Palacios and Edna to get a bill introduced to make the changes.

"We're really pushing hard for that," he said. "The city could buy power and turn around and sell it to the citizens just like we do water."

The cities would pool their buying power to purchase the electricity at a lower rate. The discounted power could then be sold to the cities' homeowners and businesses.

Broz said the move was spurred by a spike in power prices last summer, with some retail electric providers charging as much as 26 cents per kilowatt-hour.

"There's going to be a fight with TXU, Reliant and those guys," Broz said. "But it can be done."

State Sen. Glenn Hegar, R-Katy, said he's met with Broz about the idea and he's open to the proposal. The cookie-cutter approach of the past doesn't necessarily fit today's needs, he said.

"Electricity prices, let's face it, are a huge portion of people's costs that have gone up over the years," he said. "Anything that works to lower electricity prices for the end user, their customers, undoubtedly is a very good thing."

But more details would need to be made available before he makes a decision so he can weigh who the changes affect and how.

State Rep. Geanie Morrison, R-Victoria, said she would be willing to work with the group to craft a bill. Morrison, whose district includes Edna, said she would work closely with Rep.-elect Todd Hunter, whose district includes Port Lavaca.

"I think it's great anytime you can try to save your constituents money," Morrison said. "Of course, I know it's a gamble because in these economic times you don't know exactly where prices are going to be."

Once the bill is written, Morrison said she would send it to the Regulated Industries Committee to make sure there are no unintended problems. "I wouldn't think they would have a problem with that if they felt like it could help them have lower prices for their consumers."

Ken Pryor, Edna's city manager, said the optimism shown by Broz about the plan has spilled over to his city. Broz said he also is concerned about the high price of electricity.

"There are some changes that are going to have to be made in the way retail electricity is handled," he said. "This plan could get us a lot lower rate because we'd be able to negotiate the rate."

That could cut the city's own power bills and selling the cheaper electricity to the public could help ease the burden on people struggling to pay their personal power bills, he said.

Armstrong said he would need more details before saying such a program would help Victoria. "I sure would like for us to have that option."

San Antonio was able to attract Toyota partly because that city has the option of selling power at a discounted rate, he said.

"We can't cut a deal and give somebody a guarantee on power like San Antonio did and like Austin has done," Armstrong said. "So we're at a disadvantage."

Deregulation of the power industry in Texas was intended to help reduce the cost consumers pay for electricity.

While the state believes the move has been a success, customers are wondering where that savings is.

The average offer for a one-year, fixed-rate plan increased 21 percent in 18 months, according to the 2009-2010 Legislator's Guide to the Issues published by the Texas Public Policy Foundation.

That sent the price of power from 14.05 cents per kilowatt-hour in January 2007 to 17.3 cents in June 2008. The guide blames the increase on higher natural gas prices.

-----

To see more of Victoria Advocate, or to subscribe to the newspaper, go to http://www.thevictoriaadvocate.com.

Copyright (c) 2008, Victoria Advocate, Texas

Distributed by McClatchy-Tribune Information Services.

Copyright © 2008The McClatchy Company