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Texas Consumer Advocates Seek To Impose Minimum Term of 12 Months for "Fixed" Products; Define Any Product With "Usage Fees" As Variable

April 26, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Consumer advocates sought to redefine the definition of a fixed price product, and to create a voluntary standard electricity offer, in making recommendations concerning the Texas Power to Choose site

Texas Ratepayers' Organization to Save Energy and Texas Legal Services Center recommended that the definition of fixed priced product be changed to increase the minimum contract term to 12 months (currently, fixed products must be at least 3 months in length).

The Texas Coalition for Affordable Power more narrowly suggested that the Power to Choose website could exclude from its definition of fixed rate products any plan with a duration shorter than 12 months

Additionally, Texas ROSE/TLSC said that the PUCT should exclude from the definition of fixed product any plans, "with usage fees and credits," which would be reclassified as a variable rate plan.

Note that Texas ROSE/TLSC's recommendation did not explicitly target plans with narrow usage bands for credits which distort average price, but would also include, based on their language, more traditional plans which waive a monthly fee for high usage customers.

"A rate that varies by the amount of electricity a customer uses in any given month is variable, not fixed price," Texas ROSE/TLSC said

TCAP further said that, "[d]eals with usage-based fees and charges should either be removed altogether from powertochoose.org, or the default setting on the website should be set so these deals are excluded, not included, in basic searches."

TCAP and Texas ROSE/TLSC both suggested that the PUCT develop a voluntary standard product that REPs could elect to offer.

"The terms and conditions of these products would be uniform, although REPs would be free to set their own prices. Customers shopping on the Power To Choose website could make truly apples-to-apples comparisons by sorting specifically for standard offer products. This is because the only difference between these presumably fixed-rate deals would be their kWh prices. Customers also would have confidence that the terms are fair and the pricing is not misleading because the Commission vets standard offer products in advance," TCAP said

Texas ROSE/TLSC also sought to limit the number of products a REP could list on Power to Choose

"REPs would be asked to submit what they consider the best plan they have to offer in each category of plan posted (i.e., fixed price, variable priced, time of use, indexed, and prepaid). REPs would not be required to offer a plan in each category and additional plans could be offered by the REP on its own website," Texas ROSE/TLSC said

"Besides being of benefit to the consumer we also see having a limited number of plans posted as being valuable to the PUC. By having only 1 to 5 plans to review for each REP the PUC can establish a standard review of each plan posted to provide consumer confidence in the fairness of the offer and the REP's compliance with the commission's customer protection rules," Texas ROSE/TLSC said

"In conjunction with this recommendation we would also support that changes can be submitted only once every 60 days," Texas ROSE/TLSC said

It wasn't clear if the limiting on changes would be limited to changes in plans themselves (swapping out one product for another), or would apply to any change in the offer (such as limiting price changes)

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