Provider of Last Resort (POLR)

What is a Provider of Last Resort (POLR)?

  • Written By: Kelly Bedrich

  • What happens if your Retail Electricity Provider (REP) were to suddenly go out of business? In Texas, thanks to the Provider of Last Resort (POLR), your lights will stay on. But, your bill will go up dramatically!

    In this article, you’ll learn about the POLR, and why you should immediately shop for electricity if the POLR becomes your provider.

    On Tuesday, May 3, 2022, ERCOT revoked the right of V247 Power to do business in the Texas electricity market. If you are one of 24,798 customers of V247 Power, you are being dropped to the Provider of Last Resort for your market area. It’s important that you immediately shop for a new electricity provider to avoid paying the POLR rate.

    Dropped to POLR? Find a New Electricity Company ASAP!

    What is a Provider of Last Resort (POLR)?

    In Texas, the Provider of Last Resort (POLR) becomes your electricity provider if your current Retail Electric Provider (REP) exits the market for any reason. The POLR is basically a safety net if your REP were to go out of business. This electricity service is intended to be temporary so that you do not experience an interruption in service.

    The PUCT designates Providers of Last Resort as back-up electric service providers in each area of Texas open to competition. POLR service is relatively high-priced, due to the unknowns. It’s an uncertain number of customers with uncertain electricity loads.

    Will My Lights Go Out If My Electric Company Goes Out of Business?

    Retail energy is a high risk commodity business. REPs must procure power wisely, and ensure that they have enough power for their customers needs. If they don’t have sufficient cash reserves or collateral, they may have to go out of business.

    If an REP has not purchased enough electricity to serve their customers, they are forced to purchase real-time electricity to meet their customer’s needs. And if the Electricity Reliability Council of Texas (ERCOT) views the day-ahead market prices as risky, they may demand more collateral from your retailer.

    Not hedging properly, and not having enough credit and capital are both costly mistakes.

    REP out of business
    The POLR is your backup if your electricity supplier goes out of business.

    If you’re very lucky, your current REP will enter into an agreement with a secondary provider and will sell your account to another provider. The name on your bill will change, but your contract rate would be honored.

    However, if your REP goes out of business you will be served by the POLR on a market rate that is a very high electricity price.

    If you are “dropped to the POLR” or the POLR becomes your provider, you should immediately shop for a new fixed rate Texas electricity plan.

    Once you are dropped to the POLR, you will have 60 days to shop for a new provider. But you should shop immediately to avoid paying high POLR rates. If you do not switch away from the POLR within the first 15 days of service, the POLR provider may also require you to pay a deposit to keep your lights on!

    What do I do if I get “dropped to the POLR” rate?

    When REPs go out of business, their customers are automatically switched to the Provider of Last Resort in their area.

    You’ll get a notice from the PUCT that your REP is going out of business and that you’re scheduled to be moved to your POLR. You might get this notice via mail, email or telephone call.

    Once you receive notification that you’ve been dropped to POLR, you have 60 days to choose a new retail electric provider.

    If this happens to you, be alert… and immediately shop for a new retail electricity provider. Because the bad news is, you’ll be served on the POLR market price. And that rate is very high!

    Compare Residential Electricity Rates by Zip Code

    What if my Business is Dropped to the POLR Rates?

    If your business is dropped to the Provider of Last Resort, you need to move fast to protect your company from a big bill. Electricity rates under the POLR could be 3X what you will pay with a fixed rate contract.

    Work with an electricity broker like to compare rates from multiple companies. You can shop online to compare business electricity rates, and even sign your contract electronically.

    Spend more than $2500 a month? Call us at 844-214-5559 for a custom rate quote based on your usage.

    Dropped to the POLR? Shop Business Electricity Rates

    What is the POLR Rate?

    POLR rates are calculated based on the cost of electricity on the open market, called the Real Time Settlement Point Price. These prices are significantly higher than regular fixed prices.

    And, when REPs are going out of business? It’s because the cost of electricity on the open market are very high! That means your rate will be very high if your REP goes out of business and you are dropped to the POLR for your area.

    POLR bills
    POLR bills can be very expensive!

    If you find out you are being moved to the POLR, immediately start shopping around for a new electricity provider

    You can find the current POLR Rates online. But instead of wasting time with complicated mathematical formulas to see what your rate will be on the POLR? Spend that time shopping for a new electricity plan. Because we guarantee, you don’t want to stay on the POLR rate.

    Who is my Provider of Last Resort?

    The Texas POLR list is subject to change every two years and is set by the PUCT. The largest providers in each delivery area are required to serve as a POLR. Smaller providers may volunteer to participate, to share in the burden.

    Current POLR providers are listed below, by delivery area:

    • Oncor: TXU Energy
    • Centerpoint: Reliant Energy
    • TNMP: TXU Energy
    • AEP: TXU Energy

    If you are dropped to a POLR provider due REPs that go out of business, you should shop immediately for a fixed rate electricity plan. That’s because POLR rates reflect market pricing.

    About Kelly Bedrich

    Kelly Bedrich co-founded ElectricityPlans in 2016 with the goal of simplifying the complicated process of buying energy. As president and chief technology officer, Kelly keeps our development team focused on providing a user-friendly website. When not reading the latest on technology and finance, Kelly enjoys celebrating Taco Tuesday, listening to live music at local venues, and hiking.

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