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Texas PUC Commissioners Concerned About Retail Electric Providers' Ability To Reject Customers Sought To Be Enrolled Through Concierge Brokers

Will Not Take Action As Part Of Broker Rule At This Time, But Will Further Consider Issue

May 1, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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During today's open meeting, Texas PUC Commissioners expressed concerns about the ability of retail electric providers to refuse to enroll customers who are sought to be placed with a REP through a concierge shopping service or similar situation in which the broker selects a REP for the customer based on an agency relationship provided to the broker by the customer

The discussion arose in connection with the final adoption of an electricity broker rule. See our related story today for details on the final broker rule as adopted by the PUC

The final rule includes a requirement that brokers must, upon the request of a REP, provide evidence of the agency authority under which the broker seeks to enroll a client.

During the proceeding, Power Wizard had argued that delegating the verification of the agency authority to REPs is unnecessary and opens the door to potential anti-competitive abuses and discrimination by REPs against customers who use concierge services and other shopping tools to make better shopping decisions.

In discussing the decision to retain, in the rule, the authority of a REP to request evidence of a broker's agency authority, the Staff's draft preamble had recommended stating that, "The commission disagrees with Power Wizard's assertion that allowing REPs to verify the agency authority of a client agent opens the door to anti-competitive abuses by REPs. If, as Power Wizard describes, a REP prefers not to do business with concierge brokers, the commission's rule will not require it to do so."

However, in adopting the final rule, the Commission agreed with a recommendation from Commissioner Arthur C. D'Andrea to strike from the preamble the sentence, "If, as Power Wizard describes, a REP prefers not to do business with concierge brokers, the commission's rule will not require it to do so."

Commissioners agreed that the intent is to maintain the status quo on the agency issue in the final rule, and felt the now-struck sentence went too far in enshrining a REP's ability to reject enrollments from concierge services, if Commissioners later wish to address the issue

While not making any ruling on the issue at this time, Commissioners expressed concerns with the ability of REPs to reject enrollments from concierge services

PUC Chairman DeAnn T. Walker said that she is, "more and more concerned," about REPs being able to deny service to customers who are sought to be enrolled through a concierge service, although Walker said that ultimately she was not convinced either way on the issue

"I've got a little bit of a problem with that, but it is a competitive market, so maybe that's just how it is" Walker said

Walker said that SB 7 was all about giving customers choice, and asked that, if a consumer wants to hire a concierge service to select a provider of electricity to the consumer, is it consistent with the goal of customer choice to allow REPs to deny customers to ability to make this choice in using a concierge?

"The more I think about it, the more concerned I get," Walker said

D'Andrea likewise said he had a, "bit of a problem," with REPs denying service to customers seeking to be enrolled through a concierge broker, but said that he does not know quite enough to make a final decision on the matter at this time as part of the broker registration rule.

D'Andrea suggested the adopted edit (noted above) to leave the issue open and see the competitive marketplace play out, and to see if the PUC has to intervene later

D'Andrea said that his inclination is to recognize that customers have made a choice in using a concierge service, often because it can be difficult to shop due to information asymmetries, and that concierge brokers serve a valuable function

D'Andrea said that he is, "a little bit suspicious," about why REPs wouldn't accept enrollments from concierge brokers, and cited the practice of REPs to tailor plans that appear attractive on Power to Choose, but which in reality have higher costs than the 1,000 kWh quoted rate due to the mechanics of the plan

D'Andrea said that the issue is a discussion for a future day

Commissioner Shelly Botkin agreed with striking the sentence in the preamble and said that she'd like more information before addressing the issue more broadly.

The final rule includes language providing that, "A broker that is authorized to act as a client agent for the client must provide evidence of that authority upon request of the client, commission staff, or a REP with which the broker seeks to enroll the client."

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