This measure mandated competition in the retail market for electric power beginning in January, 2002. Municipally owned utilities and rural electric cooperatives have the option to adopt competition in their territories. The final bill was the result of extensive research, analysis, and discussion with careful focus on meeting the specific needs and circumstances confronting Texas. Senate Bill 7 received bipartisan support and was endorsed by utilities, major power users, environmentalists, economic development groups, regulators and independent power producers.
Plans are now well underway for the transition to an open market.
Rising Fuel Prices Over the last year, several market forces that directly affect the supply and demand of natural gas have been exerting upward pressure on prices. This activity has caused a natural gas price increase to occur at a time when there is little flexibility in energy markets. Many blame the high bills on a flawed 1996 state law that deregulated the electric industry in California and allowed competition among electric providers. While there are many factors affecting the uncertainty of California's recently restructured electricity market, the crux of the problem is that energy demand is exceeding supply. This situation has led to higher electric prices in some parts of California.