The Texas Public Utility Commission (PUC) is considering proposed rules changes that will in many ways improve consumer protection, but contains some provisions that could allow retail electric providers (REP) to disconnect medically vulnerable customers who rely on electricity to sustain their lives. Other rules being considered could make it impossible for a consumer who is in debt to a retail electric provider to switch to lower cost services, eliminating their right to choose.
While some provisions will benefit low-income families and individuals with disabilities, two provisions will clearly make it more difficult for these customers to pay their electric bills and keep the lights on:
- A REP would be able to legally disconnect a critical care customer who needs electricity to maintain life if a battery back-up is commercially available. The rule would apply whether or not the consumer actually had a battery back-up. Battery back-ups are often very expensive, reliable for only a very limited time, and intended for emergency losses of power. PUC Project Number 37622 – RULEMAKING PROCEEDING TO AMEND CUSTOMER PROTECTION RULES RELATING TO DESIGNATION OF CRITICAL CARE CUSTOMERS
- If a consumer falls behind on their bills and enters into a deferred or average payment plan, a customer could be put in a “switch-hold,” preventing them from changing REPs until their bill is paid. This denies the customer the right to shop around for lower cost provider. PUC Project Number 36131 – RULEMAKING RELATING TO DISCONNECTION OF ELECTRIC SERVICE AND DEFERRED PAYMENT PLANS
On the first proposed rule change (Project Number 37622), faced with a meeting room crowded with worried electric customers, at yesterday’s hearing, Public Utility Commission Chairman Barry Smitherman today told the group, “Maybe the words might not have been as artful as they could have been. There’s no intent to change the way we deal with critical care customers.”
Clearly, the commission could use some input from citizens on how to artfully word the rule so that the lives of critical care customers are not put in jeopardy.
The commission is also taking comments on another proposed rule change (Project Number 36131) – in person and in writing – in an effort to bring some uniformity to the extreme-weather disconnection policies in the competitive retail electric market.
One of the most often touted provisions of Texas deregulated utility law is that consumers in a free market have the right to choose their electric providers. At the hearing, several speakers objected to a proposal that would prohibit customers on deferred payment plans from seeking better deals in the competitive market until they had squared any outstanding balance due with the provider who allowed them to make partial payments during times when bills run unusually high. While Smitherman said he was open to hearing more comments on the matter, he stated that it was important not to stick electric providers with unreasonable bad debt. Opponents, on the other hand, felt the implementation of “switch-blocking” or “switch-holding” rules put company profits ahead of consumers’ ability to shopping around for the lowest available rates.
According to State Representative Sylvester Turner, “The Legislature has not authorized the PUC to institute switch blocking. It’s counter to deregulation. More Texans will be forced to go without electricity for longer periods of time. The reality is that in this deregulated market the most vulnerable consumers are being saddled with unfair constraints and regulations.”
Randy Chapman, a lawyer who represents consumer interests, said the commission is treading on unstable legal ground.
The PUC is trying to balance the needs of the poor within a deregulated industry. When our utilities were regulated, providing for those who were seriously ill or facing financial hardships was factored in as part of the cost of doing business. In a deregulated environment, we have to come up with new solutions to this problem. Citizens should submit their ideas on how to solve these issues to the Commission.
The two rule changes can be found under Project Numbers 36131 and 37622 with the PUCT.
