|This is part two of a two-part series on electricity bills.|
In yesterday’s post, we introduced you to consumer advocate Carol Biedrzycki, and her new report on the sometimes hidden fees charged by retail electric providers (REPs). Today, we’ll take a deeper dive into that report and highlight some of her suggestions for reform.
Biedrzycki is executive director of the Texas Ratepayers’ Organization to Save Energy, or Texas ROSE for short. In her new report, Texas Electricity Consumers, Beware of REP Fees, Biedrzycki finds that retail electric providers are prone to sneaking fees into their Terms of Service (TOS) agreements.“Before you choose a REP, check the Terms of Service agreement — always check, even if you are looking to switch REPs based on the experience of a friend,” the report notes.
Biedrzycki says that finding fees in the fine print can be like a scavenger hunt, and trying to comprehend the legal jargon can take “hours and days.”Studying a REP’s Terms of Service Agreement and Electricity Facts Label are your best options when attempting to avoid unwanted fees. (An electricity company’s TOS and Electricity Facts Label should belocated on the company’s website as well as at powertochoose.org.) But even reviewing these documents won’t protect you when a REP fails to report extra fees in the first place, says Biedrzycki.
In her report, the consumer advocate also warns of charges called “minimum usage fees.” These are feeds added to a bill if the customer’s kilowatt hour use for a month falls below a certain level. Essentially, consumers are being charged for conserving energy.
Biedrzycki saw minimum usage fees on the rise since 2011. Back then, only 36 percent of REPs charged minimum usage fees. Fast forward two years, and that number has increased significantly to 81 percent. Minimum usage fees range from $6.95 at Bounce Energy and Champion Services to $20.00 at 4Charge Energy, according to the report.
“Many elderly and low-income households live in small spaces and intentionally keep their power consumption low to save money and then they are penalized with a minimum usage fee.” Biedrzycki said, “Energy conservation is a goal established by the Texas Legislature. It is contrary to the achievement of the State’s energy efficiency goal to charge consumers a fee for not using enough electricity.”
But how to reform the market? Biedrzycki believes that many REP charges should be eliminated or at least folded into the overall base rates. That way, customers can better compare prices when shopping for electricity. “Customer service is an important aspect of a business and should not be a profit center,” Biedrzycki reported.
The Texas Coalition for Affordable Power also has proposed the creation of standardized products in the retail electric market. Under this idea, the terms and conditions for a standard product would be set by the Public Utility Commission, and all REPs operating in Texas would be required to offer a standard product along with any other deal they wish to offer.
REPs would be free to set any price for the standard product, but customers who compare standard products would know with confidence that they’re making apples-to-apples comparisons — and not being fooled by the fine print.
More and more electricity consumers are learning about these hidden charges on the electricity bills and becoming increasingly concerned. However, Biedrzycki believes it will take action from the Public Utility Commission and the Texas Legislature to see effective change. Biedrzycki urges all consumers who have been hit by extra REP charges to complain to the PUC and call their state representatives. You can read the entirety of her report here. To find the contact information for your local lawmaker, go here.
— 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.