| This is part one of a two-part series on electricity bills. |
Texas electricity companies have an expensive secret: located on your electricity bill are extra fees that may have nothing to do with electricity. According to a new report, many retail electricity providers (REPs) are charging absurd amounts of money for what should be basic customer service — and they’re getting away with it one loophole at a time.
In Texas Electricity Consumers, Beware of REP Fees, consumer advocate Carol Biedrzycki examines fees charged by more than 40 retail electric providers between 2011 and 2013. The results are ugly, and Biedrzycki says it’s only getting worse.
“Many REPs charge residential consumers fees for not using enough electricity and for routine transactions such as mailing a disconnection notice and taking a credit card payment over the telephone,” said Biedrzycki, executive director of the Texas Ratepayers’ Organization to Save Energy (Texas ROSE), a consumer organization.
“The fees are becoming more common and should be stopped,” Biedrzycki said.
Chart is based on information developed by Texas ROSE. Click to enlarge.
One of the most common and unnecessarily expensive REP fees is the disconnect and reconnect fee, Biedrzycki has found. Most REPs charge this fee in addition to the fee charged by the transmission and distribution utilities.
But in the age of smart meters, connecting and disconnecting a customer has never been easier — customers are basically paying REPs to do something as easy as sending an email. She said these fees are particularly ironic, given that smart meters were created to save consumers money.
According to Biedrzycki’s research, Ambit Energy charges $15 to disconnect and $50 to reconnect, Green Mountain Energy charges $45 to disconnect and $15 to reconnect, and Reach Energy charges $50 to disconnect and up to $75 to reconnect.
Of the 44 REPs listed in Biedrzycki’s report, only 4 (Champion Energy Services, Dynowatt, Infinite Energy, and Tri-Eagle Energy) have no disconnection or reconnection fees. Biedrzycki calls reconnect/disconnect fees a “gravy train” for retail electric providers.
Elsewhere in her report, Biedrzycki finds that Green Mountain charges customers $5 for copies of billing records, $15 for making over five payments in one month, and $5.95 if the bill is paid with the assistance of a live agent.
Because the retail energy marketplace was deregulated by the state more than a decade ago, REPs can set their own prices. Biedrzycki believes that doesn’t mean they should blatantly rip consumers off.
“They’re getting away with this because no one is stopping them,” Biedrzycki said.
Stay tuned for part two of this article tomorrow, which will dive deeper into the report and focus on recommendations for reform.
— Jonathan Coker
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.