Texas utilities giving away electricity after rules prove unworkable

Cumbersome deregulation rules have left some Texans in the dark without electricity after a move. But Texas legislators said at a Tuesday hearing they also are concerned that utilities are supplying some consumers free power while the grid operator tries to fix the problem.

Feb. 5, 2002

3 min read

Ann de Rouffignac
OGJ Online

HOUSTON, Feb. 5 -- Texas consumers who move could end up in the dark, while the grid operator, retailer, and wires company work through layers of paperwork, legislators conceded Tuesday.

"There were some horror stories of 10 day waits that got onto TV and in the newspapers," said Tom Noel, CEO of the Electric Reliability Council of Texas. "At best, the process should be 3 or 4 days." Noel testified before the Texas Restructuring Joint Legislative Oversight Committee.

Published reports revealed people had problems arranging for electricity service when changing residences. Some were left in the dark for as long as 10 days in January. The retail electricity market was deregulated in Jan. 1, 2002, but the system doesn't accommodate people moving from one place to another.

After the problems surfaced, service companies began turning on the power ahead of the paperwork inadvertently supplying free power. "The service companies are now turning it [electricity] on immediately and letting the paper work catch up," Noel said.

In some cases the utilities are simply not cutting the power off after a person moves so the next resident won't be without electric service. "I don't know how we will fix the problem yet," Noel said. At least one retailer is refusing to accept customers who are moving.

If a resident moves and the electricity is already on, he doesn't have much incentive to find a retailer and pay for power. "There is free power. This can cause problems," Noel said. Ideally, Noel said, processing paperwork and getting customers switched to a new electricity provider at a new address should be 3-4 days.

"Many customers were accustomed to faster move-in/move-out service under a monopoly supplier," Noel wrote in a letter to State Rep. Steven Wolens (D-Dallas), co-chair of the oversight committee. "Nobody is happy with the current situation."

Consumer advocate Janee Briesemeister, senior policy director of Consumers Union, told the oversight committee getting service at a new residence should not take more than 1-2 days. Observers say the process is too cumbersome.

ERCOT requires customers call both the electric retailer and wires or service company. Both of these parties in turn must contact ERCOT, which then notifies the customer it has received the request. The complicated process allows for a lot of mistakes. Briesemeister urged the rule be changed.

Noel prevented changing the rules would take at least 60 days. Legislators weren't pleased with the situation. "The artificial work-around should stay in place. But people shouldn't get free power," said Wolens.