TCAP Commentary: Maintain and Reform PowertoChoose.org

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It’s a great service — and one that Texas electricity shoppers need — but it also could stand some improvement.

That’s why the Texas Coalition for Affordable Power is joining with others in pushing to maintain and reform powertochoose.org, the state’s electricity shopping website. Texas regulators, responding to reports of unrealistic prices posted on the website, have begun a special review of it.

On PowerToChoose Texans can compare electricity prices, find complaint data about electric companies and sort electricity deals by terms of service. Powertochoose.org has been around since 2002, the very beginning of retail electric deregulation.

TCAP believes the website provides a valuable service to Texas electric customers. There are other electricity shopping websites in Texas, but these others are privately held and lack the transparency and public mission of powertochoose.org.

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Unfortunately, however,  some retail electric providers have figured how to game powertochoose.org. They do this by offering what appear to be very low-cost deals, but which are much costlier in practice. Because powertochoose.org sorts deals from least expensive to most expensive, these unrealistically low-cost deals become featured prominently.

Take, for example, the various offers listed on the website with power prices at 2 cents per kilowatt hour or less.  In practice, no retail electric provider can offer 2 cent power for any prolonged period of time without going broke.

REPs manage to offer these unrealistically low-cost deals by incorporating into them a system of charges and credits. These confusing charges and credits vary by electricity usage. If you use too little power, you get slapped with a charge. Use more power and you get rewarded with a credit.

This means a customer who precisely consumes 1,000 kWh of power each month — no more and no less ­— might receive the 2 cent price. But in practice consuming precisely 1,000 kWh during a given month is next to impossible.

PUC Chair Donna Nelson expresses concerns about unrealistically low prices on powertochoose.org.
PUC Chair Donna Nelson

“This is very confusing for the average consumer and will likely result in average kWh pricing per month dramatically different from the advertised rate,” said one PowerToChoose user, in comments filed with the PUC. “Even if the language was clear, electricity is not something the customer can easily know how much they use during a cycle.”

One possible solution is to modify how fixed-rate deals with credits or charges are displayed on powertochoose.org. Another is to change the rules for listing kWh prices on the website. A price calculator on the website also could help.

But whatever the solution, the problem itself has captured the attention of the state’s top utility regulator. During a meeting on Feb. 11 PUC chair Donna Nelson put bad-acting REPs on notice. “Now we have prices on powertochoose of 1 cent per kilowatt hour — these rates are not the full story of what customers will actually be charged,” she said.

The PUC has requested input from the public and interested parties relating to the powertochoose website, including responses to the following questions:

  • How is the Power to Choose website in its current format meeting or not meetings its goal to assist customers in shopping for a retail electric plan?
  • What design changes could be made to the website to improve its usefulness to consumers?
  • Should the commission change how offers are sorted? If so, how?
  • What changes to the layout of the website and the shopping results would improve its functionality?
  • Are there any changes to commission rules that would improve the process of shopping for a retail electric provider?
  • What impact would removing the shopping function from the website have on the retail electric market and consumers?

Responses may be filed to the PUCT’s Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326. All responses should reference Project Number 45730.

— R.A. Dyer

What is the Texas Coalition for Affordable Power?

R.A. Dyer is a policy analyst for TCAP, a coalition of more than 160 cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.