Beginning in October 2013, there was a new line item included in your charges. The line is labeled “Regulatory Charge.” The costs that you see in the Regulatory Charge have always been included in your base electric rate. Beginning in October, the first month of the break out of this charge, your base electric rate went down by the same amount that shows as the Regulatory Charge, resulting in no change to your total electric cost.
This separation of how BTU collects for regulatory costs is necessary primarily because of large transmission construction projects that were mandated by the Public Utility Commission of Texas. These projects are designed to bring wind energy out of west Texas to the more populated areas of the state. In future months, we expect these mandated transmission costs to begin to increase. BTU will always only collect what is owed to pay regulatory fees and transmission service providers in the ERCOT region.
What is ERCOT?
ERCOT is the Electric Reliability Council of Texas; it is the entity that manages the flow of electric power to 23 million Texas customers – which represents 85% of the state’s electric load.
If the Regulatory Charge has always been included in my bill, why split it out now?
The Regulatory Charge is separated out from the base electric rate now because of large transmission construction projects that were mandated by the Public Utility Commission of Texas. These projects are designed to bring wind energy out of west Texas to the more populated areas of the state. Charges from the state level have been assessed to electric utilities for many years, but the charges have been fairly static. In future months, we expect these mandated transmission costs to begin to increase substantially as the new transmission construction projects are completed.
You expect Regulatory Charges to go up, but how much and when?
As the costs of the transmission projects in west Texas begin to be collected, these charges will be passed along to all utilities in the ERCOT region. This collection has already begun, however we do not know exactly how much the charges will be in future months. This uncertainty is due somewhat to the timing of completion of these projects, but also because the scope of the projects has expanded since their inception However, as mentioned above, BTU will only collect what is owed to pay regulatory fees.
What does this look like on my bill?
The Regulatory Charge will be a separate line item on your bill. Most customers have one electric meter on their utility account and will see one line for “Regulatory Charge.” If you have multiple electric meters, you will see a Regulatory Charge associated with each meter.
Since these charges are for construction projects at the state level, shouldn’t the Regulatory Charge go away after the projects are completed?
The charge will fluctuate as the actual costs of the construction projects are paid, but going forward regulatory fees will exist to some degree in order to maintain the infrastructure at the state level.
Do all utilities have a “Regulatory Charge” on their bills?
All utilities within the ERCOT region are subjected to these charges, but they may not separate out the charges on their bills. Some utilities may continue to keep the charge in their base rate and others may incorporate a separate line item on their bill, like BTU, but it may be called something other than “Regulatory Charge.” BTU wants to make sure all of our customers have the ability to understand what their actual charges are and we believe it should be clearly represented on the bill for greater transparency.