Politex

Legal Hotline for Low-Income Electric Users

Low-income Texans suddenly dumped to high-cost electric providers because of the financial failures of their regular companies can now call a toll-free help line.

That's the word from Texas Legal Services Center executive director Randy Chapman, who said low-income customers can get help with problems that cannot be resolved by the Texas Public Utility Commission.

For instance, customers can get help to ensure that they continue receiving a special low-income discount,  and that some customers may qualify for help in getting failed electric companies to honor their legal commitments, he said.

"In the last month over 40,000 families have seen their electric companies suddenly go out of business," said Chapman. "Under PUC rules, they often get slammed to a high cost provider where their bills can be double what they were last summer.”

He said customers should be sure to have their electric bills and other related papers in order before calling. The legal hotline phone number is 1 (800) 622-2520.

-- R.A. Dyer

Chief elections officer takes job with Luminant

Well, that didn't take long.

Less than five hours after announcing he was stepping down as Secretary of State, Phil Wilson has re-emerged as a senior vice president for Luminant, the wholesale subsidiary of Energy Future Holdings -- that is, the company that used to be TXU Corp.

According to a press release from Energy Future Holdings, Wilson will become "Senior Vice President of Public Affairs" with oversight authority over the company's community relations, communications, regulatory and government affairs efforts.

The press release says Wilson will begin at Luminant on July 7, 2008. A press release received by the Star-Telegram four hours earlier from Wilson's state office said his last day working as Texas' top elections officer will be July 6.

Wilson, of course, isn't the first top government official to go directly from big government to big business. In March 2007, Bruce Gibson, the long-time chief of staff for Lt. Gov. David Dewhurst, went directly from that office to become a legislative consultant for TXU.

The move came just as TXU was fighting consumer groups over legislation that potentially could have hampered the multibillion-dollar deal that led to the creation of Energy Future Holdings.

Wilson's move comes against a backdrop of increasing energy prices, newly bankrupt energy retailers and in advance of a legislative session in 2009 that could bring more challenges from frustrated ratepayers.

PUC calls for emergency changes to roiling market

The Texas Public Utility Commission on Wednesday called for quick changes at the state power grid to get a lid on skyrocketing prices in the roiling wholesale power market.

In recent months, certain spot prices on the wholesale electricity market have spiked over what was supposed to have been a cap of $2,250 per megawatt hour. Typically, that electricity sells for less than $100 but on occasion it had hit the $4,000 mark.

During an emergency meeting Wednesday morning, the three-member commission directed the power grid operator to consider and implement software changes that would ensure that prices don't exceed the cap.

Experts at the PUC explained that the current cap limits the price that wholesale generators can ask for their energy. But because of a quirk in the power grid's complicated software, generators sometimes receive payments higher than what they ask to be paid -- resulting in recent prices that have exceeded the cap.

More emergency action over electric market mess

The Texas Public Utility Commission has filed notice of possible emergency changes Wednesday to the state's troubled wholesale electricity market.

In recent days, prices on the wholesale market have spiked to some of the highest levels in memory. On Friday, operators of the Texas power grid adopted new market rules meant to alleviate those spikes.

But an independent monitor of the Texas electricity market has recommended even more modifications, according to an advisory from the Texas Public Utility Commission. The PUC could take action on those unexpected recommendations during a meeting at 9 a.m. Wednesday, according to an emergency notice.

The proposed changes should help prevent certain wholesale prices from spiking above what was supposed to have been a regulatory cap of $2,250 per megawatt hour, as has occurred on several occasions in the last several weeks.  Typically, that wholesale energy sells for less than $100.

Some analysts blame the dramatic price spikes and skyrocketing fuel prices for the recent tumult in the retail electric market that has led to the failures of four separate companies and the forced transfer of tens of thousands of ratepayers to high-priced default providers.

-- R.A. Dyer

PUC commissioner Hudson leaves post

Public Utility Commissioner Paul Hudson -- a former chair of the panel -- has announced he is stepping down from that post, effective August 15.

Hudson was appointed by Gov. Rick Perry in 2003, and then designated chairman in January or 2006. He continued as chairman through November of 2007, when current chairman Barry Smitherman took over.

“Five years ago, I came to the PUC with a very long to-do list,” said Hudson, in prepared remarks.  “Having worked through that list with my colleagues, market participants, customers and our extraordinary staff, it’s time for a new list, a new set of challenges.”

Hudson did not disclose his future plans during a PUC meeting on Thursday.

The commissioner is known of his easy-going style, although as chairman he often found himself on the losing side of contentious 2-1 votes. In November, 2006, for instance, he pleaded unsuccessfully with his colleagues on behalf of his proposal to force down electric rates, in advance of the full opening of the state's retail electric market

The plan was championed by consumer groups, but rejected out of hand by electric companies. His fellow commissioners argued that it sent the wrong signal to the market.

Before arriving  at the PUC, Hudson served as a policy director for Gov. Perry. He also served as an adviser to former PUC commissioner Brett Perlman.

-- R.A. Dyer

4th electric company faces financial trouble

For the fourth time in two weeks, a Texas electric company is showing signs of failing -- although for the moment its customers won't get get involuntarily dumped to a high-cost default provider, according to officials Thursday.

The company, Houston-based Riverway Power, has filed for bankruptcy,  according to the Public Utility Commission. Operators of the Texas power grid were preparing to shift its customers to the high-cost default electric company, but then stopped that process after Riverway came under court protection.

A spokesman for the company could not be immediately reached.

PUC spokesman Terry Hadley noted that Riverway is the same company that the PUC earlier sanctioned for allegedly reneging on fixed-rate deals with its customers.

In the last two weeks, three other companies have failed to meet financial obligations to the grid operator and so have had their customers switched to high-cost default providers. Those companies include Bridgeport-based PreBuy Electric, Houston-base National Power, and Denton-based Hwy 3 MHP, which also does business as Etricity.

As a result, more than 35,400  customers who have been switched to high-cost default providers or other electric companies. At least 9,000 of those customers were from the north Texas area.
Some customers who get switched to the high-cost default provider could see their bills go up by 100 percent or more.

Also in recent days prices on the wholesale electricity market have spiked to some of the highest levels in memory. Some analysts are blaming those spikes and skyrocketing wholesale prices for the recent tumult in the retail electric market.

The operator of the Texas power grid, the Electric Reliability Council of Texas, held a technical meeting Thursday to consider engineering changes to address the price spikes.

-- R.A. Dyer

PUC may seek customer refunds

PreBuy Electric, the Bridgeport-based company that recently dumped its customers to high-cost default providers, may soon face enforcement action by Texas regulators.

According to Public Utility Commission spokesman Terry Hadley, staff at the agency recently filed paperwork to revoke a government certificate that authorizes PreBuy to operate in Texas. Although PreBuy should already have stopped operating, the step is nonetheless significant because it often signals that the PUC is preparing enforcement action, said Hadley.

He said such action could include fines. "We could see if any penalties would be appropriate, or possible refunds or credits to past customers," he said.

PreBuy is among three Texas electric companies to have recently defaulted on financial obligations to the operator of the state's power grid. As a result, thousands of Texans have been involuntarily shifted to high-cost providers of last resort companies, where rates can double or more.

Also, because PreBuy customers pay for electricity in advance, many customers may end up paying a second time for the same electricity during the shift to the default provider, according to the PUC.

-- R.A. Dyer

Phil King to examine recent electric market upheaval

Dramatic price spikes in the wholesale electricity market along with failures of two retail electric companies has captured the attention of state Rep. Phil King, the Weatherford Republican in charge of electric utility issues in the Texas House of Representatives.

King, who chairs the House Committee on Regulated Industries, said he will seek answers during a special hearing on June 23. He also has brought his concerns to both Public Utility Commission chairman Barry Smitherman and Bob Kahn, director of the Electric Reliability Council of Texas that manages the state's power grid.

"I have been assured in no uncertain terms that the PUC and ERCOT are taking corrective action to stop these price spikes," King said in a statement released Tuesday.

Last week electric wholesale prices spiked to nearly unprecedented levels -- from about $175 per megawatt-hour to $2,250, which is the maximum allowed by law.  Also last month, Houston-based National Power and Bridgeport-based PreBuy Electric failed to meet their financial obligations and dumped thousands of customers onto high-priced default electric providers.

-- R.A. Dyer

Wolens on electric market: just like college dating!

One of the more famous casualties of the recent National Power meltdown is none other than former State Rep. Steve Wolens, the former House member from Dallas who co-authored the state's electric deregulation law.

You may recall that National Power recently signaled that it could not meet its financial obligations and so has dumped thousands of customers to high-priced "provider of last resort" electric companies. Wolens, a Democrat, was one of those customers.

The Texas Public Utility Commission on Thursday said that anyone dumped to POLR service should get off -- but quick. It's just too expensive.

Wolens has followed that advice, and said Thursday that the switching experience was "great."

"Easy experience," Wolens said in an email note. "My 3rd (retail electric provider). It's like my early college days dating!"

-- R.A. Dyer

PUC emergency meeting, Part 2

Recent spikes in the wholesale electricity market may bring very high prices for several thousand North Texans who have been involuntarily moved this month to default electric providers.

That’s the word from the Texas Public Utility Commission, which met in emergency meeting Thursday after spot prices on the wholesale power market spiked to the maximum level allowed by law. That spike occurred on Wednesday, although very high prices were also recorded on Tuesday.

Wholesale prices directly impact those rates charged by the so-called providers of last resort, which are those companies that provide continuity of service for Texans whose regular electric companies have gone bankrupt or abruptly leave the market.

Apparent failures at two separate electric companies this month sent thousands of North Texans to such providers of last resort. According to back-of-the-envelope calculations, a customer on a fixed-rated contract    from one of those failed companies could see their rates more than double when they go to the POLR.

During the emergency meeting Thursday, PUC commissioners urged customers to get off Provider of Last Resort companies as soon as possible. They also signaled to POLR companies that although PUC rules allow POLR companies to charge high rates based on the wholesale market, they can also charge less.

A representative of Assurance Energy, an affiliate of TXU that serves as a POLR company in North Texas, did not have estimates readily available of how much it would be charging.

The spiking prices in the wholesale energy market also could spell bad news for ratepayers generally, as they may signal upward pressure on retail energy prices. Likewise, the high wholesale costs could cut deeply into the bottom line of electric retailers, with some analysts predicting  more financial failures in the months ahead.

Consumer advocate Randy Chapman said the PUC should insist on more financial and performance assurances from electric companies so consumers have more confidence that when they select an electric company, it won't go abruptly out of business.

“Anyone with two SUVs, a Persian carpet and $100,000 can call themselves an electric company in Texas," he said.

--R.A. Dyer