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Deregulated Electricity Is Coming to Lubbock, Texas

A challenge to Lubbock Power & Light's plan to exit the Southwest Power Pool electrical grid may delay the transition to a competitive market until 2024, giving residents more time to choose a supplier.

Dan Avery Former Writer
Dan was a writer on CNET's How-To and Thought Leadership teams. His byline has appeared in The New York Times, Newsweek, NBC News, Architectural Digest and elsewhere. He is a crossword junkie and is interested in the intersection of tech and marginalized communities.
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Dan Avery
3 min read
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Lubbock, Texas, was originally slated to move to a competitive market this fall, but federal regulators have asked for more time to review the application from Lubbock Power & Light.

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Residents of Lubbock, Texas, have been preparing for deregulated electricity since last year. It looks like they'll have to wait a while longer.

The city council voted unanimously in February 2022 to move the town of about 261,000 to a competitive energy market, allowing residents to choose from among dozens of approved retailers.

To achieve that end, the local power supply has to be rerouted from the Southwest Power Pool to the Electric Reliability Council of Texas. 

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ERCOT already oversees nearly three-quarters of Texas, including urban load centers in Austin, Dallas, Houston and San Antonio. Some 70% of Lubbock is already on ERCOT, but officials with Lubbock Power & Light have said they are determined to open the entire market to competition as a whole, "as that is the only fair and equitable way to make this transition."  

Read onThese States Have Deregulated Electricity: The Pros and Cons

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The original timeline called for residents to select a provider in August, with the official changeover happening in October.

But the plans hit a monkey wrench: In April, a group of energy cooperatives from Texas and New Mexico challenged the $77.5 million settlement LP&L agreed to pay to exit Southwest Power Pool's electrical grid. They argued that the deal doesn't do enough to protect them from possible financial fallout.

The Federal Energy Regulatory Commission, which must approve the plan, has asked for more time to review LP&L's application.

As a result, the final transfer of customers to ERCOT has been delayed. 

While no hard deadline has been set, documents presented at an Electricity Utility Board meeting in May suggest the selection period will now commence in the first quarter of next year, possibly as early as January 2024.

Based on the previous timetable, customers would then start being serviced by their new provider by March.

Proponents say the plan for deregulation hasn't been derailed, just delayed. 

"I don't think the filing puts the entire process at risk," said Michael Lee, CEO of Houston-based Octopus Energy USA, one of the providers approved for the region.

Lubbock Power & Light didn't respond to a request for comment. But officials with the company, the state's third-largest municipal electric utility, have stated they also believe the "historic move" will get the green light.

"As soon as we get federal approval, that means that we can move the remainder of the customers over," LP&L spokesman Matt Rose said at the May 16 meeting, the Lubbock Avalanche Journal reported. "Once that final customer is migrated over, that starts the official countdown to competition."

Read on: How to Switch Energy Companies

Once competition begins, LP&L will continue to transmit electricity and maintain the region's grid, but it will no longer be an energy provider in Lubbock.

The pause will give residents more time to choose their provider. If they don't select one by the new deadline, they'll be randomly assigned to either Octopus, Reliant Energy or TXU Energy. 

That ensures they aren't left without power, but they'll miss out on the opportunity to shop for a plan that fits their needs best.

"Deregulation ensures that consumers can pick and choose from multiple companies and benefit from competitive pricing, more innovative services and the freedom to select a supplier based on factors that matter to them, such as renewable energy options or customer service," Jake Edie, senior marketing director at Clean Energy Associates, told CNET previously.

For more information on Texas electric rates and companies, check out ChooseEnergy.com, which, like CNET, is owned by Red Ventures.