TEPA: Broker's Affiliation With Retail Provider Should Be Disclosed To Customers

January 7, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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In comments to the Texas PUC on a proposal for publication concerning electric broker regulation, The Energy Professionals Association (TEPA) said that affiliate relationships between brokers and retail electric providers should be disclosed to customers, as well as to the Commission in the broker registration process

See background on a proposal for publication concerning electric broker regulation here

"TEPA believes that affiliate relationships between brokers and REPs should be required to be disclosed as part of the broker's registration process and should also be required to be disclosed to individual customers. The premise of broker registration is that consumers need transparent, reliable information about various market participants in order to make an informed decision about competitive choices for electricity. If the consumer is not provided accurate and complete information, consumer confidence will be undermined, and the value of brokerage services is diminished in the marketplace," TEPA said

TEPA also offered the following comments concerning proposed required compensation disclosures

As previously reported, the proposal for publication would require brokers to disclose to customers, "A description of how the broker will be compensated for providing brokerage services and by whom." If the broker is compensated directly by the client, the broker must disclose the details of the compensation

TEPA said that, "The amount and method of compensation is considered proprietary and can vary by REP. Electricity brokering is an optional and bespoke service available to retail electric customers. While brokers may elect to disclose their fees to their clients, requiring disclosure is anti-competitive and will force the commoditization of brokerage services to the detriment of customers."

"TEPA believes rule provisions that extend PUCT oversight to broker compensation go well beyond the provisions contained in SB 1497, and are inconsistent with the expressed legislative intent and negotiated understandings of the bill's language," TEPA said

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