New Bill Could Allow Unchecked Increases in Texas Electricity Rates

Posted on Posted in Centerpoint, ONCOR, Texas Electricity News

This article from the Dallas Morning News is a bit old, but I didn’t want it to go through without commenting on it and pointing it out to the people who keep up with Texas Electricity Ratings. The article highlights a bill that recently passed the Texas Senate and House of Representatives, involving the ability for Utility companies to raise electricity rates to finance capital projects without having to go through a long and potentially costly approval process.

First, to be clear, when this article references Utility Companies, they mean Transmission and Distribution Providers (TDSPs) like Centerpoint, Oncor, and Texas-New Mexico Power, among others. It does not refer to the Retail Electricity Providers (REPs) that send you a bill every month for your electricity. TDSPs are the companies that are in charge of your Poles and Power. So they’re the guys that are responsible for wholesale electricity sales to the REPs, as well as the infrastructure that delivers the electricity to homes and businesses. They’re also the guys responsible for getting your power back on after a natural disaster like hurricanes or ice storms. So, with that understanding behind us, the new bill that has passed through both sides of the Texas legislature will allow the TDSPs to raise the prices of electricity to pay for any kind of improvement projects for the infrastructure. An example of something like this would be the Smart Meters that are currently being installed all over Texas or any other improvements to the electricity grid.

Historically, when a TDSP wants to propose a price increase to cover something like this, they’ll have to go through an oversight committee and make a proposal to raise rates, which then could be approved, denied, or adjusted by the PUC. This has often been a long time-consuming process to get rates adjusted, and not without costs on the side of the TDSPs. The idea behind this bill is that the electric rates can be adjusted immediately, which will keep the bottom line cost lower without any legal fees or interest payments that might accrue during the approval process by the PUC to determine if the rate increase is fair.

Obviously, this raises a lot of questions about the ability of this new rule change to be abused by the TDSPs while Texans get taken for a ride. However, the PUC is assuring everyone that they will monitor any electricity price changes very carefully to make sure there isn’t any abuse of the situation. If there is any evidence of abuse, the PUC says they will shut it down immediately and we will revert to the previous system of oversight and approval. Personally, I’m just as skeptical of this situation as I’m sure most people will be who are reading this writeup. However, the only thing to do about the situation now is to keep our own eyes on our electricity rates and Electricity Facts Labels for any new charges or fees that might get tacked on in the future and see if they pass the smell test.

 

2 thoughts on “New Bill Could Allow Unchecked Increases in Texas Electricity Rates

  1. This is a scam. Having worked for a large electric utility, this will be a blank check for TDSPs to pad their bottom line by passing on costs that would not otherwise be approved by the PUC through a rate hearing. Think CREZ. Think 5 billion (not including the interest on that debt) that was pushed through without having to be economically justified. This is a disaster for small consumers and users since the TDSP charges are a flat charge that all users pay regardless of how much they use.

    TDSP charges will double in 5 years if this passes with no significant improvement in reliability of service.

    1. Bill,

      That is certainly a fear. The hope is that the PUC continues their trend of showing some teeth and actually keeping an eye out for consumer interests. Of late, they seem to be more active in the market. If that kind of thing does come to pass (REP’s trying to pad their bottom line) hopefully the PUC will stand up and do something about it. After all, the money is only SUPPOSED to be for improvement projects. Again, I’m skeptical, but hopefully we’re both wrong about this.

      Thanks for the input and thoughts, however.

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