Frequently Asked Questions

Municipally-Owned Electric Utilities and Electric Cooperatives FAQs

As of January 1, 2002, municipally-owned electric utilities ("munis") and electric cooperatives ("co-ops") have the right to choose whether to participate in Texas' retail electric market. Munis or co-ops may choose to participate in customer choice at any time, if there is a resolution adopted by the board of directors or the governing body. Not all areas in the state of Texas are currently open to competition. Due to a lack of adequate competition in the wholesale electricity market to support successful retail competition, state law has included provisions to delay competition for Entergy Gulf States, Southwestern Public Service Company, El Paso Electric Company, and AEP SWEPCO. If the competitive market changes in the future, the Public Utility Commission (PUCT) would determine that these utilities are eligible to enter the competitive retail electric market if they so choose. Customers should contact their municipal utility or electric cooperative for additional information.

How are munis and co-ops managed?

Customers of munis and co-ops do not have an actual role in managing the utility. However, they do "manage" their utilities by electing the people who run them. Co-op customers are member-owners who elect the board of directors at yearly membership meetings. The board sets the policies for the operation of the co-op system. Similarly, muni customers elect the city council members that either operate the utility or appoint a board to do so. If you are not happy with your service, you can vote for new directors, or, if you are a city resident, you can vote for new city council members.

Does the PUCT have any regulatory power over munis and co-ops?

Currently, the PUCT only has appellate jurisdiction over muni retail rates; however, wholesale transmission rates are subject to Commission jurisdiction. If a muni opts into the competitive market, it will be subject to the same market rules that all other retail participants follow. As of Sept. 1, 1999, if a co-op chooses not to compete, the PUCT will only regulate it for limited purposes, such as wholesale transmission rates, service area certification, and certain reports.

How will I know if my muni/co-op decides to participate in the competitive market?

More than likely, you will receive information in your electric bill. You can also call your muni or co-op and ask.

Can munis and co-ops offer electric service to customers outside their service area?

No. A muni or co-op that does not offer retail electric choice in its own service area may not offer service outside its PUC-certified retail service area.

Who sets the rates for my muni or co-op?

As of Sept. 1, 1999, all-co-ops set their own retail rates through its board of directors. Most co-ops have been setting their own retail rates prior to 1999. City council members, or the governing body, set the retail rates for munis. Wholesale transmission rates for both munis and co-ops are set by the Commission.

What about billing, deposits, disconnection, service quality, and all other customer service issues?

Effective Sept. 1, 1999, the PUCT no longer regulates customer service for co-ops. If you have problems or questions, call your utility's customer service number. The law does require the PUCT to forward any complaints that it receives about co-ops. The co-op must not only respond to the customer or retail electric provider but also notify the PUCT of its response. The PUCT has never had any such authority over munis.

What if I favor competition?

Call or write to the board of directors or your city council members and make your views known.

Can the decision to compete be revoked?

For co-ops, the decision to enter into competition can only be revoked if no customer of the co-op has opted for choice within four years of the resolution's adoption. For munis, the decision to enter into competition is irrevocable.