Electricity users left in the dark

Choosing an electric plan has gone from bad to worse.

Four electric companies have failed in the past month, forcing more than 36,000 customers to another randomly chosen provider, some with very high rates. Other companies are hounding their customers with marketing deals and affinity programs to lock them in longer. Some companies have offered a low introductory rate, only to raise the rate considerably after the first month.

And consumers have been inundated by options: North Texans have 82 plans from 30 providers listed on the Public Utility Commission's PowerToChoose Web site -- double the number of plans offered a year ago -- on a list that takes six pages to print out.

At the same time, consumers have little in the way of information or resources to use to make a good decision on their retail electric provider, said Carol Biedrzycki, founder of Texas Ratepayers' Organization to Save Energy based in Austin.

"The electricity market should be called a disaster area," she said. "Consumers should proceed with caution."

Getting the basics

The PowerToChoose Web site will list and sort most of the local offers but ultimately provides consumers with just four pieces of information -- a rate per kilowatt-hour, whether it's fixed or variable, whether it's renewable energy or polluting, and the length of the contract terms.

But rates can change quickly, and consumers trying to shop by rate on the Web site may find that those rates are no longer valid. Three of the four best rates I found last Friday had changed a week later.

And good luck trying to find information such as customer complaint records, market share, financial assets and liabilities, ownership changes and PUC violations, Biedrzycki said.

Other than wading through the legalese in the retailer's contract or the marketing verbiage on its Web site, there isn't any other place for consumers to turn, she said.

Advocates of electric deregulation point to the number of offerings to say the market is working, Biedrzycki said.

"But it's overwhelming," she said. "There are a lot of choices, but unfortunately we don't have any objective information about these companies."

Proceed with caution

I made a mistake last year buying what I thought was a renewable-energy product with a company. Turns out even though the plan had "green" in its title and had the best rate of all the renewable-energy plans, my power comes from one of the worst-polluting plants in the state. The company said it is "offset" by buying trees somewhere, but how do I really know this happens?

Now I'm stuck for a year with this plan -- and I get paid to analyze this stuff. Does the average consumer have the time, energy or desire to wade through this material?

No, Biedrzycki said.

Her organization has been pushing for an electric-provider report card that would provide consumers with easily obtained information since deregulation began in 2001, Biedrzycki said.

Such a report card would be similar to what you can find out about your insurance company in Texas. Go to the Texas Department of Insurance Web site at www.tdi.state.tx.us and you will find a listing of all the insurers by type, how many policies they carry in the state, how many complaints have been launched against them, the date they were licensed, links to the companies' credit ratings by five different financial organizations, a listing of financial information on the companies, a history of regulatory violations and the prices consumers should expect to pay for their coverage.

Similarly, an electric-provider report card could include detailed information on customer service, business financial data and environmental record, Biedrzycki said.

"People have a lot of options but not a lot of information," Biedrzycki said.

What's ahead

In January, the PUC asked Biedrzycki to send it information on what a retailer report card should look like. She did but hasn't heard back.

Some of the information for a report card, such as a company's complaint or PUC-violation record, is available online, but it is not very accessible to the consumer, said Terry Hadley, spokesman for the PUC.

"It's not compiled into a consumer-friendly format," he said.

In light of the recent shake- up of the market, the commission is reviewing the rules governing certification and financial requirements of retail providers, and where those rules can be strengthened, Hadley said.

At present, a retail provider must meet just one of three requirements in the Texas market, including an investment-grade credit rating, a net worth of at least $50 million or unused cash reserves of at least $100,000, according to a story this week in the Star-Telegram. Most providers use the cash requirement, Hadley said.

In addition, the PUC is reviewing customer-protection provisions, including a retail electric-provider report card, Hadley said.

Such a review and possible change in rule-making would take a least a few months, he said.

How to choose an electric retailer

Choose your Web site carefully. No Web site shows all of the electric retailers, but the Public Utility Commission's Web site, www.powertochoose.org, shows most of them. Use the Web site's new sort feature to break down the plans by fixed and variable rates and renewable and nonrenewable sources for easier selection. For an environmental look at the electric companies, go to www.powerscorecard.org.

Consider paying for a quick transfer. Companies pick up new customers during the monthly meter reading, so changing companies can take a month. If you have a high-rate plan, consider paying the $7-$8 fee for a special meter reading to speed up the process.

Look at several providers' Web sites to try to determine ownership and years of experience in the marketplace. Check the news section to try to determine their marketing budget. Is community involvement important to you or a lower price?

Talk to several companies. How quickly does customer service answer the phone? How knowledgeable is the company representative? How much of a "hard sell" are they giving for certain products?

Ask about the company's deferred-payment policies in case you have trouble paying a high summer bill.

Double-check the rate offered. The PowerToChoose Web site is not always up to date.

Check for offers with the plan. Gexa offers frequent-flier miles, while Direct Energy offers one plan with two service visits for your heating and air conditioner included.

Consider renewable-energy plans. Many renewable-energy plans are among the lowest-cost plans available.

-- Teresa McUsic

Who's got the best rates in North Texas?

Best fixed rate

14.1 cents/kWh for 12 months -- YEP Energy, Houston, 866-937-5937, www.yeptexas.com

Best variable rate

13.5 cents/kWh for one month -- Ambit Energy, Dallas, 877-302-6248, www.ambitenergy.com

Best renewable-energy fixed rate

14.8 cents/kWh for 12 months -- YEP Energy, Houston, 866-937-5937, www.yeptexas.com

Best renewable-energy variable rate

14.4 cents/kWh for one month -- YEP Energy, Houston, 866-937-5937, www.yeptexas.com

Source: www.powertochoose.org