Electricity customers in Texas are searching for a Power to Choose alternative. And it’s no wonder. The Texas Power to Choose site has long been called the Power to Confuse. There are hundreds of plans to choose from, multiple rate structures to decipher, and fine print gotchas in most plans. The Public Utility Commission of Texas (PUCT) is not happy with the games that retail energy providers are playing. They have publicly blasted electricity providers for taking advantage of consumers. Now they are taking action to address these issues.
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.
America’s demand for electricity is huge, totaling 18% of the world’s electricity consumption in 2015. We take for granted that electricity will be there when we turn on the lights or crank up the air conditioner. We can’t imagine life without it. But, have you ever wondered how electricity is made, or where it comes from, or how we get it the instant we want it?
Beginning in 1879, electricity was first sold in the United States by the California Electric Light Company in San Francisco which produced and sold enough electricity to run about 20 electric lights. Since then the use of electricity has grown exponentially. Fast forward to 2016 and Americans consumed about 3.85 trillion kilowatthours (kWh) of electricity according to the U.S. Energy Information Administration. In this post we cover the basics about what powers this huge amount of consumption, the sources of electricity in the US, and the role of deregulation.
For most people living in states open to electric competition, the year deregulation was adopted marked a complete turnaround of electricity as they knew it. Instead of only having one utility to fulfill both supply and delivery of electricity, consumers got the power to choose their own supplier. Providers offering electricity plans and better electricity rates flooded the market and suddenly there were hundreds of choices for consumers.
Sadly, the windfall of electric choice is not available to all who live in Texas. Electric cooperatives (“co-ops”) and municipally-owned utilities (“munis”) are exempt from participating in deregulation. Additionally, Texas law includes exceptions for certain investor-owned utilities to delay participation in retail competition because of lack of competition in their wholesale market and/or their lack of being part of ERCOT.
What does this mean for you?
Since the Texas legislature deregulated the retail electricity industry in 2002, millions of Texans have chosen to compare electricity rates and switch electricity providers. Giving electric choice back to Texans has been extremely popular, with an estimated 92% of residents having switched their own electricity plans. The ability to switch electricity providers has resulted in significant savings for many Dallas customers.
Living in the Dallas metroplex area and being served by Oncor as your local electric utility means that you have the power to choose from among dozens of competing electricity providers. All of them offer multiple rates, contract lengths and discount offers. In addition, each provider has its own website designed to lead you through the maze of complicated offers, which are often filled with confusing EFL details, overlooked fine print, and introductory rates. As a result, many customers are still confused by legal terms and narrow usage level bill credits frequently used on electricity plans for marketing purposes. As a result, they often end up getting surprised by unexpected fees and missing out on potential savings on their electric bills.
Texas has undoubtedly been the most successful US electricity deregulation market for residents. A lot of it’s success comes from the Texas Public Utility Commission’s (PUCT) marketing efforts when it launched PowerToChoose.org. Originally known as Texas Electric Choice, today’s Power To Choose site is still very popular for Texas residential electricity shopping, but it’s issues have also come under increasing scrutiny due to rate confusion and misleading electricity plans.
What’s the biggest issue on Power To Choose? Teaser Rates. As you work your way through the various electricity plans offered in your area, you’ve probably come across a few that seem too good to be true. These teaser electricity rates create confusion for customers looking for the best deal they can get using electricity comparison sites like the PUCT’s Power to Choose.
Despite the PUCT’s efforts to curtail teaser rates by giving users the ability to filter out minimum usage fees/credits, teaser rates still overwhelm the Power to Choose site to the point it’s easy for customers to be misled on what they’re actually getting. On a recent visit, the first five pages of the default search for our zip code was filled with what we consider to be teaser rates (and that was with bill credit filter on!)
Texas electricity deregulation has given millions of Houston residents and businesses the power to choose the cheapest electricity rate. According to ERCOT, over 92% of Texas homes and businesses who live in deregulated areas have switched electric companies since deregulation began in 2002. Even though electric choice in Texas has been hugely successful for energy savings, customers are still confused by the options, terminology, and overall process of switching electric providers.
Where should you shop for electricity? Houstonians have the power to choose from an overwhelming variety of energy suppliers, plans, and options. If you live in the Houston metro area and your local electric utility is CenterPoint, over 50 different retail electricity providers currently offer electricity plans in your area. Each of these electricity providers offer sites, tools, and information on how to switch plans and providers. However, their information is often filled with electricity rates that are difficult to compare because of things like introductory rates, bill credits, narrow usage levels, unexpected fees, and legalese buried in the EFLs. Fortunately, Houston homes and businesses have electricity shopping options that make the process much simpler.
For electricity customers living in states that have allowed electricity deregulation, shopping for an electricity plan can seem overwhelming.
After all, many states have a large number of electricity providers and each provider offers several different plans that often look very similar at first glance. If you’re not sure how to get started shopping for electricity plans, you’re not alone. This short guide will get you started.
When it’s time to choose an electricity plan, it can be really confusing picking your way between all the options available and the host of initials and terms.
One of the most common sticking points for electricity customers is what, exactly, the difference is between an electricity provider (also called REP, CRES, or electric supplier) and an electric utility (also called a TDSP, TDU, or EDU). They’re both vital to the success of electricity deregulation, but they play very different roles. Understanding how they fit together can make a big difference in your overall confidence as an electricity customer trying to shop for the best electricity plan.
Efficiency, renewable energy, and deregulation are among the most pressing concerns for utility customers across the country.
Although energy efficiency and using renewable electricity sources are well-understood concepts, electricity deregulation is still cloaked in a great deal of mystery despite having its modern roots in legislation from the early 1990s.
When people talk about electricity deregulation, what they’re really discussing is a process where the electricity generator and the electricity distributor are uncoupled and customers are given the power to choose their own electricity providers. Your local utility will always be the same, even in a deregulated area, but your electricity provider can be anyone certified by your state who offers electricity plans to your city or town.