Austin, Texas – Texas has more than adequate reserves to meet the needs of electric customers despite a recent press release from the North American Electric Reliability Council (NERC) that suggested Texas " . . . should be closely watched this summer." The same release also incorrectly stated that the start of full retail competition in Texas would begin on June 1, 2001. In fact, full retail competition will not begin until January 2002.

"I strongly disagree with the characterization of our position, as suggested in the NERC press release, that Texas might experience difficulties over the next few months," said the Electric Reliability Council of Texas, Inc. (ERCOT) Chief Executive Officer, Tom Noel. "We have more than adequate operating reserves of power and should absolutely not be considered in the same category as New England and New York City."

ERCOT will utilize a phased approach for the upcoming start of the Pilot Program, in which up to five percent of retail customers now served by investor-owned utilities will have the opportunity to choose their electric provider. ERCOT adopted this approach in order to ensure that all market participants would have adequate opportunity to test their communications and operating systems before any customers are switched, and before control functions are consolidated within a single control area in the ERCOT system.

"We are disappointed that ERCOT has been misunderstood with respect to our schedule for implementing the start of a seven month testing phase for Texas before full retail competition begins on January 1, 2002. We are proceeding according to our plan, and we believe that with this phased approach, we are decreasing our risk for the kinds of problems that have unfortunately plagued residents in California," said Noel. "In fact, ERCOT is overseeing one of the most robust market restructuring programs anywhere in the United States."

The NERC press release was issued on May 15, 2001 in conjunction with the 2001 Summer Assessment.