The government could block certain Texans from purchasing electricity under new rules adopted Wednesday by the Public Utility Commission.
The rules drew immediate fire from consumer advocates, who say they effectively make the government the debt enforcer for retail electric providers. Under the rules, Texans who owe back payments to a retail electric provider would be blocked from switching service to another provider until the back bill is paid.
The rules apply only to deregulated areas of the state, and apply only to Texans on level or average payment plans if they are delinquent in payment when the payment plan is established.
Retail electric providers say the so-called “switch-hold” rules will help protect them against bad debt. But consumer advocates note there are few other areas of the competitive economy in which the government steps in with such a heavy hand.
For instance, if an individual gets behind in rent payments, the government does not ban that individual from renting a house, said Geoffrey Gay, general counsel for the Cities Aggregation Power Project. Neither does the government block consumers from purchasing food if he or she bounces a check at a single grocery store.
“If electric deregulation is really about free enterprise and competition, then it needs to be the responsibility of the retail electric provider to require sufficient deposits and take other measures to protect themselves from bad debt,” said Gay, who represents a coalition of about 150 cities that purchase electricity in the deregulated market. “That”s the cost of doing business with any other industry — why should it be any different for REPs?”
Quoted in a newspaper account, AARP policy analyst Tim Morstad said that switch holds will likely “poison existing flexible payment plans that have helped people keep the lights on… and we”re concerned the decision will lead to dangerously long electric disconnections.”
The new rules are expected to take effect next year.
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.