Lubbock is joining the Texas Power to Choose marketplace. Lubbock Power and Light (LP&L)is set to become the first legacy municipal utility to convert to electric choice since the deregulation of the Texas electricity market. In December of 2021 LP&L presented a plan to the Lubbock city council to transition the city to an open choice market. On February 15th, the cities Electric Utility Board voted to approve the transition. A week later, the decision was ratified by the city council. This means that homes and businesses in Lubbock, TX will be free to shop for the electric company that offers them the best rates.
The transition won’t take effect until late 2023 after the city’s electricity grid is fully integrated into the ERCOT managed state grid. Lubbock is mostly integrated with the EROCT grid already. There remains about 30% of the cities power to be hooked up to the main grid that provides power to the deregulated parts of Texas. LP&L has been preparing for years to join ERCOT and just last year transitioned 70% of its customers to ERCOT.
Lubbock Power and Light expects the move to the competitive retail markets will save the city over $100 million in power costs annually. Similarly, the transition of the city’s electricity production facilities to ERCOT control will significantly reduce the cost of production.
What Happens Next
There is a lot of work that must be done to prepare for such a significant change to the way power is sold in Lubbock. There are several steps required before Lubbock consumers can begin shopping for their new electric company.
LP&L will have to transition into different roll within the market. When the transition takes place, they will no longer act as a customer facing electric company. But they will still be responsible for maintaining electric meters, lines, and distribution equipment. They will still be the entity responsible for delivering power to homes and businesses in Lubbock. However, they will no longer bill the end user of electricity. They will act as a distribution utility billing the retail electricity providers who sell electricity to customers. To facilitate this, they must update their systems, software and operational procedures.
The city must also go through the process of selecting a provider of last resort (POLR) for Lubbock electricity customers. POLRs are retail electricity providers who agree to take on customers who lose their electricity providers when the providers go out of business or can no longer provide service to their customers. Once the transition takes place, Lubbock customers will have to shop for a new electricity provider to buy their electricity from. LP&L will no longer fulfill that role. Anyone who doesn’t pick a new provider will be switched to the POLR by default.
The transition must also be approved by ERCOT and the Texas PUC. Additionally, the switch will not commence until after the LP&L load has been fully integrated with ERCOT. This integration is expected to take place in May of 2023. After all other transition criteria have been met the Electric Utility Board and the city can give the go-ahead for the final move after they are satisfied that there are enough retail electric providers who a ready and able to provide service to the customers of Lubbock and that there are a sufficiently diverse number of options for customers to choose from.
Beyond that, there will likely be a plan to educate residents on what the change means to them and what their options are. There must also be a plan in place to ensure continued service for anyone who hasn’t selected a new provider by the effective date of the transition. Texas electricity rates are among the cheapest in the country. Electric choice is one of the main reasons for this.