The Texas Consumer Association stays involved with a variety of issues that affect consumers daily. Our continuing goal is to make sure Texans' interests are fairly represented at the Texas Capitol. The below is our updated Legislative Agenda and Recommendations.

System Benefit Fund: All electricity consumers contribute to the System Benefit Fund (SBF).  The fund is intended to provide discounts for low income costumers, weatherization for qualifying customers and consumer education. Unfortunately, the legislature continues to redirect most of this consumer money to the General Revenue Fund for budget balancing purposes. The legislature should, once and for all, put ALL of these funds into a “lock box” that the PUCT can direct for its intended purpose.

Variable Rate Plans: Variable rate plans provide a monthly, per kilowatt rate. However, Retail Electric Providers (REP) that offer these plans can, and frequently do, change the rate each month with no notice to the consumer.  To address some of the bad “customer experience” issues that result, TCA recommends:

1. Requiring that any variable rate plan offer listed on the PUCT’s PowertoChoose website stay in effect for at least one full 30 day billing cycle. This eliminates the possibility of a REP changing the price mid-billing cycle for new customers.

2. Requiring REPs to provide written notice to customers if they plan to increase the price of the variable plan. In 2009, the legislature addressed this issue for fixed term plans, but not for monthly variable plans. REPs should provide consumers sufficient advance notice of any price increase so that consumers can make a decision to stay or switch to a new provider.

3. The PUCT’s PowerToChoose website should include an easily visible notice to consumers that rates offered under any variable rate plan are not permanent and subject to change.

4. Require that variable rates plans can only increase a maximum of 20% over any given billing cycle.

Summer Customer Protections and Proposed PUCT “Switch/Hold”: TCA supports efforts to prevent REP’s from disconnecting low-income and other vulnerable consumers during the hottest summer months. Requiring REPS to offer qualified consumers alternative bill payment methods so they can manage their higher summer bills is a critical consumer protection in a competitive market. 

The PUCT recently adopted rule that pairs new summer and winter protections with a “switch/hold” provision, which would prevent customers that qualify and are covered by summer protection rules from switching to a new REP if they still owe the current REP money. This issue is difficult and complex.

REP’s maintain that the new rule requires them to extend additional “credit” to qualified consumers in the form of “deferred payment plans” or “level or average payment plans.” They argue that the “switch/hold” is necessary to prevent customers from “gaming” the system by simply switching to a new provider after they have been extended this additional credit. REP’s also argue that without the “switch/hold,” bad debt will increase significantly, which ALL consumers will eventually pay for through higher prices.

Other groups maintain that preventing consumers from switching to a new provider, no matter what the circumstances, is a violation of a consumer’s “right to choose” in the competitive market. They further argue that REP’s should be able to address bad debt issues through deposits and better internal risk management and debt collection policies.

REP’s counter that current PUCT rules for deposits do not allow them to be calculated or adjusted to cover the extension of credit extended to customers through special payment plans, and that current law prevents them from denying service based on bad credit.

It is important to note that this issue is somewhat unique to the competitive market. Consumers who have their service disconnected due to non-payment in municipal or cooperative electric service areas cannot have their service reconnected until they pay their overdue amount.

TCA Recommendation: TCA believes this new rule balances expanded protections for those in need with reasonable provisions that make sure consumers meet their obligation to repay any extension of credit by REP’s required by the rule.