The electric utility industry is in the midst of radical change after decades of being a wholly regulated business. Federal and state policy makers, growing competitive pressures, and changing generating technologies are moving the industry into a partially deregulated, competitive environment. Texas' traditional investor-owned and municipally-owned electric utilities face special challenges as deregulation occurs. These challenges are a direct legacy from the policies of the regulated past, and threaten to perpetuate an unlevel competitive playing field. This report examines a number of these challenges, issues particular to traditional electric utilities such as potentially stranded investment and sunshine laws, to determine whether they remain good policy or should be revised. Only if the playing field is as level as possible will competition, and the public, be truly served.