What To Do If Your Texas Electricity Provider Goes Broke

The Texas retail energy space is not an easy place to compete. When companies run into trouble and leave the state or go out of business, their customers still need their electricity.

Texas law protects customers that suddenly lose their retail provider by transferring them to a different electricity supplier called the Provider of Last Resort (POLR). The POLR picks up the responsibility to supply the old provider's customers with electrcity supply at a default rate. POLR service is a safety net for customers and is intended to be temporary and used only under rare circumstances when a REP is unable to provide service, or when a customer requests POLR service.

What Does a POLR Do in ERCOT?

A POLR is a retail electricity provider (REP) that acts as the default energy supplier within an electric utility's service territory. If your provider decides to cease operating in Texas, they will continue supplying you with electricity until the POLR (or "default provider") can shoulder their load. In this way, the process is seamless and free of service interruptions.

PUCT designates approved REPs to provide POLR service for each customer class in each electric utility service area in the deregulated market. Because of the potential that a large number of customers could be affected, the PUC requires some large REP companies to provide default service. Other providers are encouraged to volunteer for default provider service on a yearly term as well. The POLR provider list changes yearly and can be tracked here.

The PUCT describes POLR rates as “relatively high-priced,” because of the “costs associated with planning and the risk of serving an uncertain number of customers with uncertain electricity loads.”

Again, if you are transferred to a default provider, you should use it as a temporary solution while you shop for a new Texas electric supplier.

What Kind of Energy Rates Can I Expect from a POLR?

Unfortunately, when a provider stops doing business in Texas, their customers will no longer get their electricity at the same rate from the POLR. That means, consumers face variable high rates that can be extremely volatile. As a result, monthly bills on this default service are often painfully expensive.

What Are My Options with POLR Service in ERCOT?

Texas law requires ERCOT to notify REP customers by mail that they are being moved to POLR service. You will also receive a mailed notice from the default provider regarding the change, and potentially phone calls and emails as well.

  • Carefully read the notice from the POLR. You will then need to contact them to arrange to pay for service they provided since your REP left the market.

  • If you do nothing when the notice arrives, you WILL be transferred to the default service. As a result you WILL pay a very high rate for your electricity. That high rate can spike even higher, especially during extreme weather.

  • You are not obligated to stay with the default service. Once you've been notified by the POLR service then you need to shop for a new provider immediately!

  • If you choose to stay on the POLR rate, you will have 60 days to switch to another electricity plan with the default provider or choose another REP. During this time, you may switch to a different REP free of charge if you do not want to stay with the POLR.

    Will the Exiting REP Return My Deposit?

    The PUC requires REPs that leave the Texas market return any unused portion of a deposit to a customer that has been transitioned to POLR service within seven calendar days after a meter read.

    If you choose to stay with the default service provider or fail to switch to another REP, the POLR may require a deposit be paid by you after 15 days of service.

    Again, you are free to switch providers. We have no deposit and pre-paid electricity plans available in all deregulated areas of ERCOT.

    You can read more information about POLR policies on the Texas PUC website.

    What should I look for when I shop for a new retail electricity provider?

    You want to shop for a new Texas electricity plan in order to protect yourself against potential rising prices. For that reason, you should sign up with a different supplier and select a fixed-rate plan.

    We recommend that you switch to a strong, highly-rated electricity provider. With the hot summer approaching and wholesale electricity prices possibly rising through the roof, you need to be with a solid, well-financed company that is in business for the long haul.

    Which electricity supplier should I switch to?

    We have many great plans available from established, stable, well-financed providers.

    Can you recommend a specific plan?

    We've researched the plans in the Texas market and find that these plans deliver a good combination of price and quality that meets the needs of many Texas electricity consumers:

    Our Recommended Plans Katy, TX


    What kinds of plans are available?

      • Flat rate plans are electricity plans that have the same price per kWh, regardless of how much you use. These plans tend to have higher rates at 1,000 kWh but your bill amount should directly follow your usage amount.
      • View example EFL
      • Some plans have different rates at different usage amounts, or tiers. These can make your bill amount seem unstable and not weather oriented.
      • View example EFL
      • Bill credit plans are plans that give you credits at certain levels of usage. You will generally pay a higher rate per kWh that will be offset when you hit an arbitrary threshold. These generally make the rates look nice when right at 1,000 kWh.
      • View example EFL
      • These plans have very high monthly charges but little-to-no usage fees up to a certain point. After you've used a certain amount of electricity you will begin being billed per kWh. They can work out nicely if your usage is consistent and right around the sweet-spot, but if your usage is generally low you should probably stay away.
      • View example EFL