Switch-holds — that controversial practice that allows electric companies to block Texans under certain conditions from getting service to light their homes, run their air conditioners or power their refrigerators — is in the news again.
The Houston Chronicle reports that three companies owned by power giant NRG Energy will pay a combined $900,000 to settle allegations relating to the controversial practice.
Although permitted in Texas, switch-holds have been criticized by consumer groups who say they put state government in the heavy-handed position of becoming a bill enforcer for private companies. Under the Texas switch-hold rule, electric companies can direct the state’s electric grid operator to flag delinquent accounts that have met certain criteria, thereby preventing those customers from switching to new providers.
But staff at the Texas Public Utility Commission alleges that Reliant Energy, Green Mountain Energy and U.S. Retailers — all owned by NRG Energy — went further than even the switch-hold rules permit. According to staff, the companies imposed arbitrary waiting periods before allowing customers who had paid their bills to switch providers.
As reported by Ryan Maye Handy of the Houston Chronicle, the companies argued their actions were not in violation in the rules.
“We stand for and go above and beyond what is required to help customers with bill pay assistance,” said NRG’s Dave Knox, as reported by Handy. “We also stand for complying with all rules and regulations that govern our business. We are pleased that the settlement agreement has been approved and this issue resolved.”
Under a regulatory settlement finalized last week, the companies also will offer a collective $1.3 million in bill payment assistance for low-income customers through 2017, according to the Chronicle. The newspaper reported that the agency probe stems from complaints filed in 2013.
Former state Rep. Sylvester Turner, now mayor of Houston, has said the state’s switch-hold policy disproportionately harms the elderly and poor. He also has said that it can result in longer service disconnections than would otherwise be the case without the policy.
R.A. Dyer is a policy analyst for TCAP, a coalition of cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.