Sam Houston Electric Cooperative

Guest Editorial: Standing in the Gap -
Cooperative Fights Against Entergy's Proposed $1 Billion move to ERCOT

In his book Standing in the Gap, Lloyd M. Uglow chronicles the contributions of small army outposts on the Texas frontier and how they provided protection in the years following the Civil War.

The Texas frontier has long since been tamed, but battles are being fought today on the energy front. We believe our obligation as leaders of the Cooperative is to “stand in the gap” and protect our members from those with self-serving interests who, if they have their way, will bring to rural East Texas the same high electric rates that consumers are paying in the deregulated areas of Houston and Dallas.

Close to home, regional electric provider Entergy Gulf States and the rest of Southeast Texas are currently not part of the electric grid that covers most of the state and is known as ERCOT. Because Southeast Texas is not part of ERCOT, we have not been subjected to the high electric rates that much of the state has been paying under deregulation.

However, as part of their transition to competition plan, Entergy is working feverishly to become part of the Texas power grid, a move that by their own calculations will cost Texas consumers at least $1 billion.

And who’s going to pay for it? If Entergy has its way, you will. Not Entergy. Not Entergy’s stockholders. The majority of Texas ratepayers will pick up the tab. In fact, Entergy wants ERCOT customers to pick up 94.5 percent of the $1 billion price tag. On top of that, Entergy estimates its own customers’ electric rates would increase by as much as 38 percent following the move.

As a not-for-profit Cooperative, it is our duty to look out for the best interests of our members. That means providing safe, reliable electricity and keeping rates low. To that end, we recently worked with Texas legislators to develop legislation that would keep Entergy connected to the eastern United States power grid, thus protecting lower electric rates in Southeast Texas.

We testified before the House Regulated Industries Committee in support of keeping Entergy where it is. We were pleased when the legislation passed through the Texas House of Representatives 139 to 3, with two members present and not voting. However, the legislation died in the Senate after it did not receive a hearing in the Senate Business and Commerce Committee. The Public Utility Commission of Texas (PUCT) has conducted hearings to determine if Entergy should be allowed to move into ERCOT. PUCT staff is on record as opposing Entergy’s efforts to join the Texas power grid.

The list of those who oppose Entergy’s plan is long. The cities of Beaumont, Port Arthur and Orange, as well as other cities served by Entergy are against the move. More than 100 cities served by TXU, including Dallas and Fort Worth, are on record as being against the move. The cities of Austin and San Antonio are also against the move. Consumer groups are against the move. The 10 cooperatives of East Texas, who serve over 300,000 members, are against the move.

Why then, would it make sense for Entergy to move into ERCOT? It doesn’t. So, we at Sam Houston EC are “standing in the gap” to protect our members and all Texans from higher electric rates. That’s our job. And it’s the right thing to do.