Rep. Phil King Asks PUCT to Act on Prepaid Electricity Price Cap

Texas State Rep. Phil King has written a letter to the PUCT asking the Commission to consider, "how we may be able to set up a system that does not punish REPs for being prudent in purchasing electricity in advance when POLR rates drop drastically when the MCPE goes negative."

King was referring to statute and PUCT rule which prevents REPs from charging, for residential prepay products, a rate in excess of the maximum POLR rate, which is based on the MCPE.

As previously noted, per Subst. R. §25.478(a)(5), and pursuant to Public Utility Regulatory Act (PURA) §39.107(g), "a REP that requires prepayment for metered residential electric service may not charge an amount for electric service that is higher than the price charged by the POLR in the applicable transmission and distribution service territory."

King noted that when prepay REPs hedge power, the price at which they hedge may end up above the MCPE, especially in months in which low-cost wind power drives the MCPE down.

King's letter did not raise any issues not cited by Rep. Jim Pitts, who, as only reported by Matters, recently asked the PUCT to look at this issue (see 12/7 for discussion)

King also did not recommend any specific actions for the PUCT to take in order to address this issue.

King's letter was filed in Project 39969.