Why no competition for LP&L? - KCBD NewsChannel 11 Lubbock

Why no competition for LP&L?


It used to be that residents in Lubbock could switch to Xcel energy if they weren't happy with LP&L. That changed in 2009, when LP&L bought Xcel Energy's assets inside the City of Lubbock for $87 million.

This summer many LP&L customers were upset with their high electric bills. The company says it was the result of a rate increase that was needed to remain financially stable.

So the question was raised, why can't another company come in and create competition locally? We have found an answer.

It all begins with the Public Utility Commission of Texas (PUC). They created the boundaries designating where electric companies in Texas can service customers. When Xcel Energy left Lubbock, LP&L became the sole provider. The boundaries can be changed, but the PUC says that's rare.

"There have been rare instances when a party may challenge an existing jurisdiction," said Terry Hadley, Director of Communications for the PUC. "They have to file a petition."

Hadley said it takes only one person going to the commission and filing paperwork to challenge the jurisdiction, but he recommends they come with a strong case.

"It can be an individual person or more," he said. "Someone challenges an existing policy or program and they're just filing at the commission. There is no set number of signatures, but a lot of evidence, more highly populated areas and a good case greatly helps."

There are two big additional hurdles. The South Plains region is on a grid known as the Southwest Power Pool which crosses state lines. The grid runs through seven states: Texas, New Mexico, Arkansas, Oklahoma, Missouri, Nebraska and Louisiana. 

Any changes would need approval from all electricity providers in the West Texas region as well as Federal approval.

"That would have to be something agreed on by all the local utilities," he said. "It is very difficult to establish a competitive market for an isolated area. It would be much more realistic to involve the entire region."

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