The state’s electricity shopping website has been in the news lately, and not for the right reasons.
Consumers, consumer groups and media watchdogs have called foul after electric retailers began using the site to promote misleading offers. The three-member Texas Public Utility Commission has twice intervened.
But with all the controversy and ordered fixes, one potential reform so far has failed to gain traction: the electric shopping website could include a more robust search function that takes into account a broad range of different power usage levels by its users.
Although it sounds arcane, adding such a function could help discourage disreputable electric retailers from gaming the site. A survey by TCAP also found such functionality common among electricity shopping websites operated by other states.
The Texas state-sponsored electricity-shopping website, powertochoose.org, has been around since the beginning of retail electric competition in the state. On it, Texans can compare electricity prices, find complaint data about electric companies and sort electricity deals by price and terms of service. Separate for-profit electric shopping sites also operate in Texas and elsewhere, although not with the public service mission of powertochoose.org.
But starting around 2016 electric retailers began gaming powertochoose by creating deals that exploit a quirk in its search function.
Texans using the site must first input an estimate of their own monthly electricity usage before conducting a search, but the website provides them only three options: 500 kilowatt-hours per month, 1,000 kWh or 2,000 kWh. At some point over the last several years electric retailers began mathematically structuring deals that produce improbably low prices at those tiered levels, but that simultaneously saddle consumers with dramatically higher per-kWh rates for usage levels other than 500, 1,000 or 2,000 kWh. For instance, a consumer might find a deal that legitimately delivers 5-cent-per-kWh power if he or she consumes precisely 1,000 kWh per month, but find that that same deal carries a dramatically higher per-kWh rate if his or her monthly consumption is slightly more or less.
These potentially misleading deals then get listed prominently in powertochoose search results.
“If you don’t land exactly on that amount — using 500 or 1,000 or 2,000 kWh (near impossible) — you may pay a steep penalty fee — it’s plain stupid,” explained Dave Lieber, a consumer watchdog with The Dallas Morning News.
In response, the PUC’s three commissioners have ordered website changes, both two years ago and earlier this month. The most recent include one that will help website users filter out plans with different per-kilowatt-hour prices for different usage levels. PUC staff has said that this should help reduce gaming on the website.
However, a recent TCAP survey of government-sponsored electric shopping websites in other states reveals that rather than employing three-tiered systems, many allow consumers to input any usage amount. Ratepayers conducting website queries can input monthly usage amounts of 1,000 kWh or 2,000 kWh, but also input 1,279 kWh or 422 kWh or any other amount that occurs to them.
In theory, this more robust query function should help savvy consumers avoid the potentially misleading deals that plague powertochoose. At the very least, it would allow ratepayers to judge how different usage patterns affect their per-kWh prices and also make it more difficult for electric retailers to game the website.
State-sponsored websites in New York, Pennsylvania, Massachusetts and Rhode Island — among others — feature this basic function. The “savings calculator” on the website operated by Connecticut also allows electric ratepayers to deploy their actual energy usage levels in searches, as opposed to usage estimates.
Some for-profit websites in Texas also feature an actual usage function or some variation of it. However, for-profit sites in Texas and other states on occasion also have come under fire from consumer advocates for a lack of transparency in their operations, for the potential of pay-to-play offers on them, for incomplete listings of electric retailers and for questionable business ratings of electric retailers.
In Connecticut, for instance, that state’s consumer counsel this month questioned whether such sites had consumers’ best interests at heart. “They’re just trying to sell you one of four suppliers who pay them,” said Connecticut Consumer Counsel Elin Katz, after reviewing one of the for-profit sites.
The Texas Coalition for Affordable Power supports the continued operation of powertochoose.org, including its shopping function. TCAP has urged the PUC to continue its vigilance over powertochoose.org and to make course corrections when necessary.
“The website is owned by the public, and as such the public has a right to expect that it remains transparent and free of deceiving offers,” TCAP said in a prepared statement.
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.