On top of high kilowatt rates you pay, on top of bitcoin miners paying as little as 2.5 cents per kWh, on top of surprising spring and fall calls for conservation, now come several new ways a Texas electricity company can hurt you.
This is what happens in a lightly regulated, free-market electricity system.
Consider the strange cases of two different men who don’t know each other but both fell victim to incompetence and deceit. In both cases what happened to them could easily happen to you. Learn these warning signs.
I want to start with Raymond McMains of the small town of Pollok in East Texas. See if you can figure out why his problem happened before I tell you.
McMains first realized something was off when he received a text alert that he was unregistered from receiving Oncor outage alerts. When he tried to reregister he got a message to call Oncor.
An Oncor rep checked his address and told him his name and phone number didn’t match. He’s lived in the house for 26 years. The rep said he couldn’t talk to him anymore because the account wasn’t in his name.
McMains called his company, Gexa Energy, with whom he had a one-year contract. He always paid on time.
Gexa said it would take a month to investigate.
The next day his power went off. He called Oncor, which promised to make his situation a priority. Six hours later, the power came back on.
He called Gexa again. That didn’t go well. Gexa wanted him to pay a big deposit, which he remembers as around $200, and to sign a new 12-month contract. He declined. (Gexa did not respond to The Watchdog’s request for comment.)
A couple of days later, his power shut down again.
“I had no power and no hope of getting any,” he says. “So in desperation, I went to PowerToChoose.org.”
He signed up with Discount Power because the company assured him it could restore power quickly in 1 to 7 days. But once he signed, they said it would be a month. (Discount Power did not respond to The Watchdog’s request for comment.)
“I begged them to move it up, which they did. Power came back on later that day.”
PUC gets involved
Did you figure out what happened? McMains got slammed.
A woman called two electricity companies owned by NRG — Reliant Energy and Direct Energy. She gave her address as McMains’ and gave her personal information. Hours after making the agreements, she called both companies and canceled.
This is scary. Apparently, anyone could do this to someone else at any time. After that, the power goes off and you have to beg to get put on a priority list.
McMains doesn’t know why he was picked.
Angry, he filed complaints with the Public Utility Commission against Reliant, Direct Energy and Gexa.
It was no surprise when the PUC ruled in favor of the companies. The PUC said they did nothing wrong. But there’s one paragraph in the ruling letter that should give you pause:
“The Texas retail electric market is currently designed to allow customers the ability to start service with a new address without proving ownership to the specific premise. Retail Electric Providers have no way of knowing if the change in service was done in error by the other REP or was authorized.”
My simple advice: sign up for Oncor outage alerts since that’s the canary in the coal mine. Also, state lawmakers must tighten up proof of dwelling rules.
McMains jokingly said he should slam the home addresses of PUC leaders.
“They said it’s OK,” he told me.
In a joint statement, Reliant and Direct Energy said the companies do require verification of identity to help combat fraud and this type of scam.
Company spokeswoman Pat Hammond said, “We’ve seen an uptick in electricity scams, and we’re working to inform consumers about what can be a complicated fraud … These fraudsters open accounts to receive electricity service under stolen identities. But the service is either fake or short-lived.
“They may use the addresses of unsuspecting consumers, resulting in their accounts being transferred and closed unexpectedly or even electricity being disconnected.”
McMain’s take? He calls the Texas electricity system “absolutely terrible.”
“I still can’t understand how this happens.”
A smart shopper
Here’s the story of John Ferrell of Dallas, not as complicated as McMains’ but high on the annoyance scale. Plus, something happens at the end that never happens.
Ferrell describes himself as a smart consumer. He jokes that maybe that’s one reason that he signed an electricity contract with SmartEnergy.
Ferrell is a smart shopper because he switches companies near the end of an expiring contract.
Until now that was the smartest advice I could give. By switching to new companies you get lower introductory rates.
But after signing up with SmartEnergy, Ferrell was notified in a “we regret to inform you” letter that the company changed its mind and didn’t want him as a customer. When he called to find out why, he was told because of “multiple switches.”
This strikes at the heart of smart electricity shopping. Can they do that? (SmartEnergy did not respond to The Watchdog’s request for comment.)
Ferrell filed a complaint with the PUC.
Here’s what never happened before: in mid-April the PUC notified Ferrell that SmartEnergy had not violated state rules.
The Watchdog asked the PUC about this on April 29.
One day later, the PUC sent Ferrell a letter. Sounding like a referee, the PUC note states that upon “further review … we have changed our original determination and have concluded that SmartEnergy failed to comply” with a state rule regarding disclosure.
“Although SmartEnergy can refuse service to a customer due to having multiple switches, [SmartEnergy] failed to state the specific reason in the [rejection] email.”
So it’s a loophole, a technicality, but we’ll take the win. In this world, that hardly ever happens.
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