What LP&L's shift to electric choice means for you
If you get your electricity through Lubbock Power and Light, you already know the provider has gone through some changes over the past few years. A major one was joining the state's ERCOT power grid. Later this year, customers will be able to choose who they buy their power from.
LP&L spokesman Matt Rose joined News Director Sarah Self-Walbrick in the studio to answer some questions about the process.
For more information and answers to other most-asked questions, visit LP&L's website.
Sarah Self-Walbrick: Let's start with some background. Why did we join the ERCOT power grid?
Matt Rose: Sure. This has been a project that has been underway in some form since 2015. So we're almost nearly a decade into this kind of transformation of the utility. And I mentioned that we've been going through this for about 10 years, because when myself and the new leadership arrived at LP&L in 2014, we were really hit with a pretty substantial decision. And that decision was: do we continue the status quo and build a very large power plant to supply power for our customers for the next 30 to 50 years? Or do we make a pretty consequential move and join the state's electrical grid known as ERCOT?
Had we built a power plant, we would have had to have debt funded that power plant about $750 million, and our ratepayers would have been the ones that solely paid that off. By joining the ERCOT grid, we had to build transmission lines, but we get a rate of revenue from the ERCOT grid that pays back those lines. And so our customers are not out any sort of money in terms of debt payments going that direction. And so we decided that that was the best path, it gave us the most diverse fuel supply, the most options in terms of how we put together our power supply.
SSW: That change is leading to another later this year. After y'all move the remaining 30% of customers to the ERCOT power grid, customers will choose their new electricity provider. What do they need to know about that process?
MR: Starting in June, that'll start the countdown. And then, on the schedule right now, August 2, we will open up a shopping window, and that shopping window will last four to six weeks. That's when all of the customers that we currently hold can go out and choose their new provider.
LP&L is not going to be an option in this mix. We're getting out of that power business altogether. But you will, as a customer, go pick your new provider during that shopping window. We will then shut down that shopping window in September and go through a short blackout period. I hate to use the word blackout in this field, but we'll go through a short blackout period where we shut it down, and we make sure everybody's connected where they need to be connected with their retail provider.
But importantly, we have already as a utility, as a city, gone through a bid process and selected three providers that will be default providers when we make this move come October of 2023. Meaning if you are a customer that has not chosen a provider, either because you're not aware that it was going on, or you didn't know what to do, or you just didn't have the ability to, you will be automatically assigned to one of these three default providers. You will be given a month-to-month rate for 90 days, which will be based on the average market price that you could receive in the competitive market. So you're really not doing any better or worse than somebody that's chosen. And then if you want to stick with that provider long term, you can, or if you want to immediately go pick somebody you can. But it's important that we did that so that nobody falls through the cracks as we make this transition.
SSW: How many electric providers do we expect to enter the market?
MR: It's our expectation that our market is going to look very similar to the markets in Midland and Odessa, San Angelo, Wichita Falls, Abilene. There are about 30 providers that offer about 120 to 150 plans.
SSW: So how should folks expect this to affect their bills?
MR: We believe that when we go into the market, folks here in Lubbock are going to find better cost rates unless there's a spike in natural gas. So I think the timing is right on this. But going forward, if natural gas goes up, those plans are going to go up. It's like anything else in a competitive market. But we think right now, we're going to be in a good price point this summer. It's not gonna be as great as it is right now, because it'll be hot in summer and natural gas will be used and that price will go up. But we think it's going to be about as best of a time for us as you can, entering the competitive market for the first time.