Texas Electricity Ratings Review Explanation of the Week: 8/15/2016

Posted on Posted in Centerpoint, Consumer Advocacy, Deregulated Electricity, Green/Renewable Energy, ONCOR, PUC/ERCOT, Texas Deregulated Electricity, Texas Electricity

Here at Texas Electricity Ratings, we are starting a new regular column that will look at a review that someone has submitted and examine it. The idea is to help consumers understand how the Texas electricity market works. This week’s review comes from “Susan,” in north Texas:

I moved into my first apartment on July 11th, 2016. I started my service with Cirro Energy that very same day. The company seemed decent, their website was easy to use, they had a decent weekly rate and I was able to sign up for service online without much hassle. Unfortunately, this positive set up was not any foreshadow into the experience I would later have. I received the first bill on 07/27/2016. The bill was $45.79. This seemed appropriate as the billing cycle was only 14 days. I willingly paid the charge without much inspection of the bill. I received a bill that equaled $104.01 several days ago. I checked into the charges further after gasping at the indicated fee. The Energy Charge or the price that I SHOULD be charged solely was $49.56. There was an unaccounted for fee of $41.45 that had ONCOR Electric Delivery Charge next to it. I was incredibly furious, can you imagine opening a bill that you thought you knew the contents off and finding a misleading charge like this? It was horrible. I called the company, Cirro at the number 1-800-692-4776. The first representative was very unhelpful. They were short with me and spoke to me like I had no idea about how energy is applied to a residence. I spoke with a “supervisor” who was also very incompetent. The only thing they could say was “Well, refer to your contract.” That is the boldest cop out of all time. For one, the “contract” does not mention there are alternative energy options to look at, it lumps every company into the same category, by making it seem like it’s just a charge you will incur with everyone. WRONG. Green Mountain Energy uses Wind Energy to distribute power and they list in their contract any additional fees and why they are able to offer a competitive rate. Cirro Energy is DECEPTIVE as they come. They are modern day crooks. I respectfully asked to have my service cancelled so that I could go with another company that explained their rates without any smokes and mirrors. Cirro Energy told me that they would require a $150.00 cancellation fee! $150.00? For what? For the energy that you would need to physically remove from my household? Are you kidding me? I explained that this was unacceptable and asked for them to kindly waive the cancellation fee and I would be on my way. They did not waive the fee and repeatedly told me to refer to my “Contract”. Contracts are important, I agree – but when the contract is not written to the same speed of the consumer, it’s false advertising and thievery. It is extremely misleading to not show the customer which plans have the charges bundled vs. the ones which are unbundled. I would have never in 1 million years agreed to a 6month contract if I knew this was how the company did business with their customers.

First, I want to thank “Susan” for submitting a quality review to our website. It was a thoughtful and honest take on her experiences with Cirro. Unfortunately, there are a couple of incorrect items in there I would like to clarify. And again, this is in no way Susan’s fault. The problem is that there is a lack of understanding of how the electricity market works in Texas, and that’s NOT the fault of the consumers. It’s very often the fault of the providers and the vague and toothless PUC rules that don’t protect customers as much as they should. It’s also a matter that there isn’t a good resource for education on the Texas electricity market, which is sort of the point of this whole article…to try and find a teaching moment in Susan’s unfortunate experience.

Lets start with this section:

I received a bill that equaled $104.01 several days ago. I checked into the charges further after gasping at the indicated fee. The Energy Charge or the price that I SHOULD be charged solely was $49.56. There was an unaccounted for fee of $41.45 that had ONCOR Electric Delivery Charge next to it. I was incredibly furious, can you imagine opening a bill that you thought you knew the contents off and finding a misleading charge like this?

While it’s not often advertised clearly on an Electricity Fact Labels (EFL’s), every electricity company’s EFL and bill is going to have Electricity Delivery Charges, be they from Oncor, Centerpoint, or any other TDU company in Texas. That’s just the law. Each company breaks it down differently on their EFL’s, and it’s a lot harder to see on some than others, but it will appear on EVERY customer’s electricity bill. The fact that this charge is often hidden in the fine print doesn’t make these situations any less frustrating to customers like Susan, however. That being said, there’s nothing deceptive or unethical going on here. Every bill has delivery charges from every TDSP, no one is immune. Looking at Cirro’s EFL, it lists specifically:

Transmission and Distribution Service Provider (TDSP) Delivery Charges will be passed through to the customer as billed from TSDP without mark-up. For updated TDSP Delivery Charge information, please visit our website at www.cirroenergy.com/TDSPcharges

It’s right there in the facts label, but unfortunately most people don’t really know what everything in the facts label means, particularly as it relates to their electricity bills and what they will look like.

Here’s a quick video that explain how TDU charges work:
TDU charges

Another misconception is her following quote:

For one, the “contract” does not mention there are alternative energy options to look at, it lumps every company into the same category, by making it seem like it’s just a charge you will incur with everyone. WRONG. Green Mountain Energy uses Wind Energy to distribute power and they list in their contract any additional fees and why they are able to offer a competitive rate.

If I’m understanding this correctly, Susan is trying to say there are alternate energy options, such as 100% wind power energy. While yes, this is true, it doesn’t matter if someone is purchasing wind or solar power, the TDU’s such as Oncor and Centerpoint above will STILL be charging a transmission delivery fee on everyone’s bill. Transmission and Delivery fees are the cost of getting the electricity from the generator (be it wind turbine or natural gas plant) to your house. If she means there are ways to deliver electricity without paying those charges, she is mistaken. Even if she’s inferring that clean energy sources don’t have to pay transmission charges, she’s still mistaken. In fact, even when you buy a Green Energy plan, you’re still getting the same dirty electricity from burning coal…the only differences are Green Energy credits. In fact, this is a direct quote from a Green Mountain Energy EFL:

You will not have electricity from a specific generation facility delivered directly to your service address, but your purchase ensures that renewable energy equal to 100% of your paid electricity usage is produced using renewable resources on an annual basis.

In other words, green energy credits are a great way to subsidize environmentally friendly energy sources, but they don’t mean that anyone gets out of paying for transmission and delivery charges to the Oncors, Centerpoints, and AEPs of the world. It really just comes down to how transparent an electricity company is about displaying these charges on their bills and EFLs. But at the end of the day, Transmission and Delivery Charges are included in every bill, and they will typically be about half of every customer’s electricity bill.

Here’s a video from Bounce Energy that explains how EFL’s work:

 

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