Many people have lots of gripes about the deregulated electricity market in Texas. Some people think it’s a sanctioned form of graft to drive up prices. Some people seem to believe that it creates unnecessary complications. Many people simply don’t understand exactly how the process works, which partly explains people with the first two point of views. However, when the Texas electricity market was deregulated in the early part of this decade, it was with the express purpose of letting a free market reign…well…free.
What exactly does that mean to customers? Well, the general idea of the benefit to customers was the idea that competition between different providers would force them to evolve into better services for the customer base. With market competition, no one could afford to rest on their laurels, no one company could afford to offer exorbitant rates when competing providers were substantially cheaper. Customer service would be at a premium, and the retail electricity providers (REPs) that offered the best customer service would do much better than their competition when it came to retaining customers. In short, the fact that no electricity company was operating on an island would force them to improve their business and their processes, to the benefit of us, the consumer. This makes sense, right?
And by and large, this has worked. Customers with bad experiences with one provider have often found great service with another REP who is happy to have their service. The prices in the marketplace, thanks to low natural gas rates, are as cheap as I can ever remember seeing them. Customers have outlets to express their dissatisfaction, and many REP’s have put great focus on customer service and retention. Except, apparently, for Reliant Energy.
I was looking over some of Reliant’s offers the other day, and I noticed something that struck me funny. Examining the Electricity Facts Labels (EFL) of their plans, under additional fees, I noticed a $5.95 Customer Center Access Fee. Certainly this seemed wrong. Was Reliant really reserving the right to charge a customer $5.95 for calling Customer Support? I kept looking around, and I noticed that it’s printed right on their web page for each plan, I’d simply missed the text. Taken verbatim from their website:
Customer care representatives are ready to help you 24-hours a day for $5.95 per call
Wow. There’s no misunderstanding that message, I don’t think. If you’ve got a problem, Reliant Energy would be thrilled to help you…for a small fee. When most other electricity providers are striving to use top notch customer service to set themselves apart from their competition, Reliant Energy is actually trying to monetize customer service to increase their coffers. Normally when someone accuses an REP of price gouging, I laugh. However, this actually fits fairly close to the mark.
Now, I’m not certain if it applies to all of their plans, but it is present on the few I checked. And I’m not certain as to how or when these charges get added onto a customer’s billing account.That much isn’t really clear from their information. Is it discretionary? If so, when does it apply? Or does it always apply? What happens if a customer has a billing error, or something that might genuinely not be their fault, like an erroneous disconnect notice? Do they have to pay $5.95? If so, to me that seems like paying to go out to dinner at a restaurant and then paying for the cleanup and dry cleaning bill if a waiter spills food and drinks all over your outfit.
Personally, I think charging people a fee (and not a cheap one) for every customer service call is outrageous. What kind of company that offers a service is only willing to assist you if you pay them? Can you imagine if your cable went out, and the only way your cable company would come out and fix it was if you had to pay them? Particularly if none of it was your fault to begin with? I cannot. Is the next thing on their list a $10 monthly charge simply because we have the honor of having Reliant Energy as our electricity provider? Fortunately, when one company tacks on fees such as this one, Texans that live in deregulated areas have the option of switching to other providers that value their customers and are willing to answer their questions and complaints…free of charge. That’s what makes electric choice in Texas so fantastic.
Below is a link to a PDF file of one of Reliant’s EFL’s which discusses the charge:
http://www.reliant.com/files/0901751880921abb.pdf
wow. great insight matt. thanks as always for your post.
Reliant Energy provides a range of plans and options for our customers, including how they can contact us. Our customers who choose the Reliant Energy Basic Power plan – the one you refer to in your article – receive one of the most competitive rates available, and can contact us any time by email or our 24/7 online chat service. They also have access to all of their account information through our voice response system and our online account management at reliant.com. If someone on the Basic Power Plan chooses to call our Customer Care Center for account information, there is a charge. If they are calling because of a mistake we made, to report an outage or to discuss moving to a new plan, there is no charge. Only the Basic Power Plan has this charge.
Bill Clayton
VP of Customer Care at Reliant
That’s fair Bill, and I realize that you have lots of options for customers. However, I would think customer service and a phone operator to discuss issues for ALL your customers would be part of the deal. All of the other REP’s I’m aware of on the market offer phone support for their customers with their most competitive rates. I certainly know that as a customer for other services I’ve had problems with, 24/7 chat support can be extremely frustrating and time consuming. Do you have a clearly posted list of when the charges do or do not apply on your website somewhere I can link to? Because it wasn’t immediately clear to me. It also seems like there could be a lot of charging and contention for what constitutes a “charge worthy” phone call. Are accounts immediately hit with the charge, and then debited later? Is it based on a customer service representative’s arbitrary appraisal of the situation? There’s a lot of details I couldn’t find explained.
Good to see that a Reliant VP finds it necessary to defend his company on a WordPress blog by underplaying the idea that they’d charge a “customer service fee” at all – Basic Plan or not. He also forgot to mention that 800 kWh must be used or you will be charged a $9.95 service fee. When you go on vacation be sure to leave the lights on! At 8.4ยข you’ve got to make up your money somehow!
http://www.reliant.com/files/0901751880903309.pdf
http://www.reliant.com/PublicResourceDispatcher
I believe that you and EnergyMan are being unfair in your criticism of Reliant. I looked at all of the plans for Oncor and the Basic Plan has a per KwH charge that is far lower than anybody else. This plan would meet my needs very well since I never call customer service and I am glad to trade no customer service calls for a lower rate. This is a service exactly like my bank has, where I get free checking in exchange for no live teller visits. Far from “outrageous” this is instead a great service. As for EnergyMan, please explain your thinking here. A Reliant VP responds to an unfair blog post and you think that is somehow *bad*? Can these companies do *anything* that would satisfy you, other than roll over and give you something for free?
George, what exactly is unfair? Criticizing a company for charging for something that every other provider offers for free, as a common courtesy? There are plenty of providers that offer unlimited customer service at comparable price’s to Reliant’s Basic Service plan without an additional surcharge. Reliant is the only one that is attempting to monetize customer service for one of their plans. I believe that it is perfectly valid to raise critical questions.
http://www.texaselectricityratings.com/variable_ratings.php?TDSP=Oncor
I got that link off of your website, please note the rate for the Reliant basic plan: 5.2. The only other one that is even close is the Bounce “Thrifty Saver” that comes with “Earn choice of FREE movie tickets or companion airfare, bill credits, and FREE electricity!”
I don’t want movie tickets, I want a cheap rate, and this Reliant product is fantastic. You make it sound like a ripoff and like they are trying to pull something over on their customers. On the electricity ratings website at least, the customer service fees are clearly documented.
In short, it is not a ripoff or a scam, it is a moderately priced product that meets the needs of some but not all customers, kind of like a product you would expect a company to offer that is trying to serve its customers well.
I think the tone of your post is needlessly provocative as well as that of EnergyMan. “As a common courtesy” as if customer support personnel grow free on trees. Your tone is needlessly provocative and misplaced and your criticism seems completely unjustified and unfair.
Actually, George, there’s a number of plans at that rate. StarTex has one at 5.1 that comes with free, unlimited customer service.
Additionally, there’s something else you’re not considering at all. All of those rates are Introductory rates. Which means that you only get the 5.2 rate for the first month of service. What is the rate going to be after that service? Typically somewhere in the 10-12 cent range. So you’re not actually even getting good rate. Because that’s how month to month plans typically work. Read the electricity facts label. So I’d save the rhetoric how this will allow you to keep a low rate. It’s patently false. Additionally, are customers getting charged for customer service calls after 2 months when they confusedly call in to inquire why their rate is now 12 cents, when they signed up for 5.2?
I don’t think it’s a scam. They’re stating it clearly. I think it’s another way to boost profit and revenue, by creating a plan that cuts out customer service from customers unless you pay for it. Everywhere else offers it for free.
On the EFL for the Reliant Basic 12 plan there is listed a “Service Processing fee” of up to 5.95
Is this the customer service fee you are referring to?
Actually, the fee I’m referring to is the “Call Center Access Fee.”
Why can’t i find a website that compares ALL of the plans, including the “base rate” or customer rate or “minimal usage charge” etc. Comparing the rates without thaking into account additional charges for being a customer is not an apples to apples comparison. Some companies don’t even have a “base rate” or “customer charge” processing fee etc.
Terrie,
They can’t include minimum usage charges across the board because different REPs charge different prices at different usage thresholds. So that eliminates comparison for that rate. Same thing with Base Rates. Customers have to read the fine print in the EFL’s on their own and make a decision. REP’s with high minimum usage charges at lower amounts might make sense for homeowners, but not for apt users per plan, etc. You have to read the EFL’s for each plan. All of the potential charges are listed there, and then you just have to compare. It takes some research, but all the information is present.