Texas House Committee Reports Favorably Bill To Ban Wholesale Index Products
Rep. King Asks Whether Fixed Rate Rollovers Onto High "Index" Rates Need To Be Addressed
March 19, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Texas House State Affairs committee reported favorably a substitute for HB 16
Text of the substitute was not available as of publication time, but the substitute would, as described during a hearing, "ban the sale of wholesale index products," to residential customers. Such products were further described as those previously offered by Griddy
During the hearing, a witness for Texas Competitive Power Advocates called HB 16 a "great bill" and said that, "Residential customers don't have the expertise to weather those rates," under wholesale index products
The Association of Electric Companies of Texas also testified in support of the bill, calling wholesale index products "detrimental" to residential customers, and, "not a good idea for Joe Texas."
A witness for Octopus Energy (formerly known as Evolve Energy) testified "on" the bill, recommending changes that would allow retail electric providers to offer a wholesale index product to residential customers subject to new restrictions
Specifically, Octopus recommended that a price cap be placed on a residential wholesale index product such that the average all-in price per kWh for a month under the plan cannot be more than 300% of the all-in price from the immediately prior month
Octopus also supports additional disclosures for residential wholesale index products
Rep. Matt Shaheen expressed some concerns with eliminating a product or service available to customers, and wondered whether any issues could be addressed by mandating various disclosures.
Rep. Phil King asked whether the bill should also address fixed rate plans which rollover to an "index" plan, as defined under current PUC rule (index plans may be any rate derived from a pre-defined pricing formula that is based on publicly available indices or information that is disclosed to the customer, not necessarily a wholesale market pass-through)
King said that his mother was rolled over from a fixed rate plan to a plan that cost 17 cents per kWh.
The committee also reported favorably substitutes for the following bills. Language for the substitutes was not available as of publication time
HB 10 - relating to changes in ERCOT governance
HB 11 - relating to weatherization for generators and TDUs
HB 12 - relating to a study on a statewide disaster and extended power outage alert system and implementation of that system
HB 13 - relating to the establishment of the Texas Energy Disaster Reliability Council.