Following a trend in states across the nation, the Texas Legislature looked closely at deregulating the electric utility industry in the 1997 legislative session. Though a deregulation bill failed in that session, the 1999 session figures to pick up where the previous session left off. While deregulation stands to affect all utilities operating in the state, issues facing municipally owned utilites stand to affect both the fate of the individual utilities and the cities which own and operate them. Thus, these utilities and their city governments face tough decisions should the Legislature implement competition. Furthermore, the state must make policy decisions in transitioning the state to a competitive model, and the decisions of municipally owned utilites on whether to compete or to sell their utilities to a prospective competitor clearly impact the state's analysis. This paper will examine the history and prospective future of municipally owned utilities, the paper will ultimately pose the question of whether the state maintains an interest in keeping municipally owned utilities a viable competitor to the much larger private utlities should the state decide to deregulate the market.
-- Author's foreword.