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Economic Impact of AECT Member Companies
1. Economic Impact of AECT Member
Companies
Testimony Before the House Committee on!
Economic & Small Business Development!
January 26, 2012
!
Legislative advertising paid for by: John W. Fainter, Jr. • President and CEO Association of Electric Companies of Texas, Inc.
1005 Congress, Suite 600 • Austin, TX 78701 • phone 512-474-6725 • fax 512-474-9670 • www.aect.net
2. AECT Principles!
• AECT is an advocacy group composed of member companies committed to:
- Ensuring a modern, reliable infrastructure for the supply & delivery of
electricity.
- Supporting efficient competitive markets that are fair to customers and
market participants.
- Supporting consistent and predictable oversight and regulation that will
promote investment and ensure the stability of Texas’ electric industry.
- Promoting an economically strong and environmentally healthy future for
Texas, including conservation and efficient use of available resources.
• AECT member companies remain dedicated to providing Texas customers with
reliable service and are committed to the highest standards of integrity.
The Association of Electric Companies of Texas, Inc. (AECT) is a trade organization of investor-
owned electric companies in Texas. Organized in 1978, AECT provides a forum for member
company representatives to exchange information about public policy, and to communicate with
government officials and the public. For more information, visit www.aect.net.
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3. AECT Companies!
Within ERCOT!
Retail Electric Providers
Transmission and Distribution Utilities
Generation Companies
3
4. AECT Companies!
Outside of ERCOT!
SERC Reliability Corporation
Southwest Power Pool (SPP)
Western Electricity Coordinating
Council (WECC)
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5. Electric Grids in Texas!
• The majority of Texas is FERC
covered within the Electric NERC
Reliability Council of Texas
(ERCOT), which is separate
from other grids, which
typically span multiple states.
• Portions of Texas are also
covered by:
- SERC Reliability Corporation;
- Southwest Power Pool
(SPP)
- Western Electricity
Coordinating Council
(WECC)
(ERCOT)
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6. ERCOT Restructuring Spurred !
Massive Generation Investment!
• The competitive
market has steadily
added new
generation and
greater efficiency
to the wholesale
market.
• Generators in the
competitive market
shoulder the risk of
building new power
plants, bringing
efficient, cost-
effective
generation to
consumers.
Sources: Energy Velocity, NERC, PUC 6!
7. Overall Economic Impact!
AECT Member Companies
• Over 19,000 Employees
• Over 38,000 MW of Generation:
– 38 Natural Gas Plants
– 17 Coal Plants
– 2 Nuclear Plants
– 7 Wind Projects
– 1 Hydro Plant
• 11 Lignite Mines
7!
8. Taxes Paid, Collected and
Remitted!
2009 Taxes Paid by AECT Member Companies
$ in millions
• Taxes Paid on Company Assets and Activity
– State Taxes* $586
– Local Taxes** $1,051
• Additional Taxes Collected and Remitted
– State Sales Tax $209
– Local Sales Taxes $134
• TOTAL $1,980
*State taxes include sales, franchise, state gross receipts tax, PUC gross receipts assessment
and the System Benefit Fund fee
**Local taxes include property, sales and franchise fees 8!
9. Impact of Proposed Nuclear
Investment!
• 8,800 MW of new nuclear power in Texas has been
proposed
– Comanche Peak Units 3 & 4 (3,400 MW)
– South Texas Project Units 3 & 4 (2,700 MW)
– Exelon Victoria Station (2,700 MW)
• Nuclear plants bring high-paying jobs and positive
economic impacts to local economies.
• Extending Chapter 313 of the Texas Economic
Development Act would help these plants become a reality
9!
10. Taxes by Fuel Type!
Coal Natural Gas
• Property Taxes: AECT member • Property Taxes: AECT member
companies pay an average of companies pay an average of
$9,154/MW in annual property taxes $598/MW in annual property taxes on
on coal-fired generation. natural gas-fired generation
• Production Taxes: Wyoming • Production Taxes: Texas imposes a
imposes a 7% severance tax on 7.5% tax on natural gas production,
surface coal production and 3.75% regardless of its final use or
severance tax on underground coal destination
production.
Nuclear Wind
• Property Taxes: AECT member • Property Taxes: AECT member
companies pay an average of companies pay an average of
$16,929/MW in annual property tax $10,123/MW in annual property taxes
on nuclear-powered generation. on wind-powered generation.
Uranium mines are also subject to
property tax.
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