Texas PUC Removes 1 Cent Plans

Posted on Posted in Consumer Advocacy, PUC/ERCOT, Texas Electricity, Texas Electricity News

In what I consider to be an outstanding move today, the Public Utilities Commision of Texas (PUC) has removed the 1 cent plans from the front page of the Power To Choose (PTC) website. The website, a state sponsored entity, serves as an open marketplace for electricity providers to show their plans to customers. The problem with these plans however, is that they’re somewhat deceptive to casual shoppers who don’t dig far into the fine print of their plans.

The basic gist is that the low 1 cent rates are achieved through bill credits, which they receive if they hit a certain threshold or window of usage each month, say 1,000 kilowatts. If a customer fails to use that, no credits kick in, and their rate is more like 10 cents per kWh, instead of the advertised 1 cent. Obviously this proved confusing and troublesome to some customers who expected a much lower electricity bill because they failed to read the fine print.

Personally, I think this is a smart move for PTC and works in serving the interests of the customers. Shoppers can still find these minimum usage electricity plans, but they have to actively seek them out. They no longer appear on the first page of the PTC search grid. As a state sponsored site, it is important that Power To Choose do their best to look out for customers and keep the Retail Electricity Providers (REPs) from “gaming the system,” which is perpetually a problem with the PTC website. Which led to one really interesting quote from Paul Ring, who runs the always excellent Energy Choice Matters website:

Such “whack-a-mole” regulation compels the question of whether customers would be better served by visiting a third-party site which, unlike a “neutral” state-sanctioned site, may offer opinions on the best products, and which plans are simply gimmicks. Moreover, unlike the Power to Choose site, third-party sites are financially invested in ensuring customers select a satisfactory product so that customers return to the site in the future — a motive which should eliminate the listing of any products that are not in the customer’s interest.

It’s hard to argue with his logic.

Donna Nelson, Chairman of the PUC, also stressed that this is also just a first step, and that the PUC would also be looking into whether these minimum usage plans might not even fit the current definition of a Fixed Rate plan.

At the end of the day, customers want an easy to understand ordering process, and plans such as these with formulas for certain rates are often too complex or hard to explain online without the help of an electricity expert, something the casual shopper often doesn’t even know that they need. Today was definitely a victory for the good guys.

Leave a Reply

Your email address will not be published. Required fields are marked *

Website Protected by Spam Master

* Copy This Password *

* Type Or Paste Password Here *

This site uses Akismet to reduce spam. Learn how your comment data is processed.