Still uncertain is whether Texas customers will embrace deregulation, particularly after the problems in California. The rules here establish an immediate retail price reduction of 11 percent to 17 percent, a drop partly attributable to the low price of natural gas, which is often used to fuel electric generation plants. This savings is built into the "price to beat," the state-mandated price per kilowatt hour that the old utilities will be allowed to charge under deregulation to keep their customers. New retailers will be allowed to offer lower prices as a way to entice customers to switch.

Texas officials have taken pains to reassure consumers (and journalists) that California's problems were unique.

In California, the state deregulated the wholesale power market while keeping retail prices capped. This caused the state's two biggest public utilities to lose billions of dollars when wholesale prices spiked and the retail price caps prevented them from passing the costs along to consumers. One reason the prices jumped was the price of natural gas, then at a record high.

California officials, including Gov. Gray Davis, also accused several energy companies, including Enron, of manipulating prices and making the state's problems worse, a charge the companies denied.

California's problems were also partly attributable to a lack of supply; the state had not built a major power plant in roughly a decade.

The state endured rolling blackouts and other problems before federal regulators ordered restraints on electricity prices last summer. In September, the California Public Utilities Commission voted to shift away from deregulation.

While about two dozen states, including most of those in the Northeast, have begun deregulation, others, like Nevada, New Mexico and Oklahoma have postponed plans in the wake of California's problems. Texas officials, on the other hand, express confidence in their plan.

Unlike California, Texas deregulated the wholesale electrical market in 1995, providing a time buffer to work out any kinks before introducing retail deregulation this year. And also unlike California, Texas has seen about 30 power plants built in the state in the last six years. Officials say the state's electrical supply exceeds demand by 23 percent.

Nor does the state's plan mandate the sort of retail price caps that crippled the California utilities.

"We have more than enough capacity and supply of electricity," Mr. Hadley said. "And the mechanics are in place to make adjustments for any dramatic spike in fuel costs."

Still uncertain is whether Texas customers will embrace deregulation, particularly after the problems in California. The rules here establish an immediate retail price reduction of 11 percent to 17 percent, a drop partly attributable to the low price of natural gas, which is often used to fuel electric generation plants. This savings is built into the "price to beat," the state-mandated price per kilowatt hour that the old utilities will be allowed to charge under deregulation to keep their customers. New retailers will be allowed to offer lower prices as a way to entice customers to switch.