The Restructuring of Power Industry & How It Affects Me

1. The Restructuring of Power Industry & How It Affects Me Yunqiang Lu, Ph.D. February 2005 ALL Global Solutions

2. 电力供应市场化 vs 家庭用电账单电力知识普及讲座 -- 主讲人：吕运强博士 • 电力基本知识，美国电力工业及市场化概况 • 德克萨斯州电力的市场化 • 电力市场化对普通居民用户的影响及应对措施 ALL Global Solutions

3. How Does Power System Work? The primary energy: coal, nuclear, hydro, natural gas, wind, solar, etc. is converted to electricity (secondary energy). ALL Global Solutions

4. Regional Reliability Councils • Western Electricity Coordinating Council • Midwest Reliability Organization • Southwest Power Pool, Inc. • Electric Reliability Council of Texas, Inc. • Mid-America Interconnected Network, Inc. • Northeast Power Coordinating Council • East Central Area Reliability Coordination Agreement • Mid-Atlantic Area Council • Southeastern Electric Reliability Council • Florida Reliability Coordinating Council ALL Global Solutions

5. What is power system Restructuring? Integrated Monopoly Power System: generation, Transmission, distribution, and related services Generation Company Restructuring Transmission /Distribution Company Retail Electric Provider ALL Global Solutions

6. Power Industry Restructuring in U.S. • PURPA 1978 –Allow unregulated generators • EPACT 1992 –Wholesale competition and open transmission access • FERC Orders 888, 889 –April 1996 –Functional unbundling of transmission –Voluntary formation of ISOs (1998) • FERC Order 2000 –December 1999 –RTO Compliance Filings on October 15, 2000 –RTOs Operational December 15, 2001 ALL Global Solutions

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8. ISO and RTO ALL Global Solutions

9. Why Restructuring and Deregulation? • Restructuring and deregulation introduce the competition in power system industry • Allow customers to have more control over their purchase of electric service • Lower rates • Speed the development of new products and services • Create new jobs • Stimulate economic development • Help our environment ALL Global Solutions

10. ERCOT • Electric Reliability Council of Texas; • Officially founded in 1970; • Independent, not-for-profit organization; • Utility Commission of Texas (PUCT) is ERCOT's principal regulatory authority; • About 85% of the state's electrical load ; • 20,000,000 people and 200,000 square miles ; • More than 76,000 megawatts of generation, 37,000-mile power grid. ALL Global Solutions

11. 85 percent of the electrical power in Texas • 75 percent of the land area in Texas ALL Global Solutions

12. Texas Power Industry Market, Participants Public Utility Commission of Texas (PUCT) Supervisory Technical Advisory Committee (TAC), four standing subcommittees ERCOT, Board of Directors, executive Supporting Regulating Coordinating ALL Global Solutions

13. Restructuring in Texas • 1995, Deregulated Wholesale Market • 1999, Texas Electric Competition Act (SB7) • September 1, 1999 through January 1, 2002 - Frozen Rates • January 10, 2000 - Separation of Business Activities • April 1, 2000 - Transmission and Distribution Tariffs • December 31, 2000 - Market Power Mitigation, <=20% in a region • June 1, 2001 - Retail Pilot Programs • November 1, 2001 - Capacity Auction • January 1, 2002 - Customer Choice Begins (Price to Beat, 6% less than the frozen rate) • January 1, 2004 - Meter management and meter reading ALL Global Solutions

14. Key Provisions • Investor-owned electrical utilities services will be unbundled • Electric wires companies will continue to be regulated • Power Generation Company's electrical capacity ownership will be limited • New competitive Retail Electric Providers must establish a "price to beat“ • No-opt provision for municipally-owned utilities or cooperatives ALL Global Solutions

15. New Market Participants • Resources • Load Serving Entities (LSEs) • Transmission and/or Distribution Service Providers (TDSPs) • Qualified Scheduling Entities (QSEs) • Non Opt-In Entities (NOIEs) ALL Global Solutions

16. How Does It Affect Me? • Transmission and distribution company is the actual delivery of electricity across poles and wires to your home • Retail Electric Providers sell electricity to you and provide functions such as customer service and billing • Use an aggregator for the power purchase • Choose a new retail provider by Jan 1, 2002 • Changing provider ALL Global Solutions

17. Retail Electric Provider • Residential Retail Electric Providers (20) • Business (Non-Residential) Retail Electric Providers (44) • Aggregators (41/68) ALL Global Solutions

18. Choosing Provider • Find electric providers serving your area • Or, use an aggregators • Compare each Retail Electric Provider’s rates and services by checking Electricity Facts Label • Electric rates • Contract terms • Penalty for early cancellation • Sources of power generation • Choose the electric provider that meets your particular needs • Establishing a new service ALL Global Solutions

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22. Other Competitive Services • Security Lighting • Energy Audits • Energy Efficient Products • Energy Efficiency Programs • Metering • Customer Usage Information ALL Global Solutions

23. Your Rights as a Customer • Non-discrimination, slamming and cramming, privacy information, etc • Choose a new Retail Electric Provider • File a complaint • State-sponsored "No-Call Lists" -- Statewide Do Not Call List & Electric No-Call List • Programs for Low-Income Customers • LITE-UP Texas program • Qualification of Low-Income • Work with REP on an individual basis(Payment Assistance Funds) • Non-Payment & Disconnection ALL Global Solutions

24. Bill Content • Meter: • ESI ID • Meter Number • Mult (Multiplier) • Current Usage • Current/Previous Meter Reading, Service Period • kWh used with Multiplier • Rate • Base Charge • kWh charge • Fuel Cost Adjustment Charge • Historical Usage • Billing Address ALL Global Solutions

25. Billing • You will receive a monthly bill via U.S. Mail. • You have the choice of receiving your bill electronically, if both you and your Retail Electric Provider agree. • Your bill will include a toll-free phone number that you can call during business hours with questions or complaints. • Your bill will also include a toll-free number you can call 24 hours a day, seven days a week, to report power outages and concerns about safety of the electric power system. ALL Global Solutions

26. Energy Savings at Home • A/C, Heating, Ventilation (60~70%) • heating, ventilation and air conditioning system, return air and ductwork systems • Summer, each degree below 78°F, +9% cooling costs • Winter, each degree above 70°F , +3-5% heating costs • Home Insulation • Attic insulation, Radiant barriers, Weatherization, Windows • Appliances and lighting • Thermostats, Refrigerators & freezers, Water heaters, Ceiling fans, Lighting, Dishwashers, Washing machines & dryers, Cooking appliances • Pools ALL Global Solutions

27. Energy Savings Tips • Good home insulation • Proper size/type of equipments/appliances • High efficient equipments/appliances • Keep good conditions of the appliances • Properly use AC/Heating system and thermostat • Smartly use your ceiling fans • Replace inefficient lights • Properly locate the appliances ALL Global Solutions

28. Actions & Info to Reduce the Bill • Choose a proper REP • Energy efficient appliances • Energy saving home • More Information for energy efficiency: Department of Energyhttp://www.doe.gov, Texas Department of Housing & Community Affairs http://www.tdhca.state.tx.us, or any other retail electric providers for energy saving information ALL Global Solutions

29. Any Questions? ALL Global Solutions

30. Thank You! Happy Chinese New Year! ALL Global Solutions