On March 17, the Texas Senate adopted Senate Bill (SB7), enabling the Texas electric market to open for retail competition and customer choice on January 1, 2002. As discussed in SB7, a "competition pilot" consisting of five percent of the Texas market across all customer segments began on June 1, 2001 and end December 31, 2001. On and after January 1, 2002, each retail electric customer in Texas, except retail electric customers in regions that are not certified as qualifying for competition by the PUCT, and retail customers of electric cooperative corporations and municipally owned utilities that do not opt for customer choice ("opt-out entities"), shall have customer choice.

On May 9, 2000, the Public Utility Commission of Texas (PUCT) appointed ERCOT as Program Administrator of the Renewable Energy Credits Trading Program. This program is described in Subsection (a) of Substantive Rule 25.173, Goal for Renewable Energy. This section states:

The purposes of the Renewable energy credits trading program are:

(1) to ensure that the cumulative installed generating capacity from renewable energy technologies in this state totals 2,280 megawatts (MW) by January 1, 2007, 3,272 MW by January 1, 2009, 4,264 MW by January 1, 2011, 5,256 MW by January 1, 2013, and 5,880 MW by January 1, 2015, with a target of at least 500 MW of the total installed renewable capacity after September 1, 2005, coming from a renewable energy technology other than a source using wind energy, and that the means exist for the state to achieve a target of 10,000 MW of installed renewable capacity by January 1, 2025;

(2) to provide for a renewable energy credits trading program by which the renewable energy requirements established by the Public Utility Regulatory Act (PURA) §39.904(a) may be achieved in the most efficient and economical manner;

(3) to encourage the development, construction, and operation of new renewable energy resources at those sites in this state that have the greatest economic potential for capture and development of this state's environmentally beneficial resources, ;

(4) to protect and enhance the quality of the environment in Texas through increased use of renewable resources, ; and

(5) to respond to customers' expressed preferences for renewable resources by ensuringensure that all customers have access to providers of energy generated by renewable energy resources pursuant to PURA §39.101(b)(3), and to ensure that the cumulative installed renewable capacity in Texas will be at least 2,880 MW by January 1, 2009.