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National Power Co. reverses course, will honor electricity contracts

AUSTIN -- National Power Co., a small Houston-based electric retailer that found itself in hot water for announcing plans to break fixed-rate deals with its customers, has reversed course and said it will honor those contracts after all.

"National Power Company has decided to rescind the scheduled rate increase set for late June 2008," the company said in an e-mail released Friday by the Texas Public Utility Commission. "All fixed-rate pricing and terms shall remain as originally agreed. National Power Company apologizes for any confusion caused by the rescinded letter."

The company earlier had sent out letters advising customers that it was canceling the existing fixed-rate plans and raising prices. The move could have meant that some customers who signed annual contracts last winter would see their bills go up by as much as 50 percent, according to figures provided by the Public Utility Commission.

The company did not respond to requests for comment Friday.

Terry Hadley, a spokesman for the PUC, said the agency had received more than 400 complaints about National Power. He said that PUC staff had been in discussion this week with National Power officials.

"Our chairman has stated that a fixed rate is just that -- it's pretty clear that you shouldn't have an arbitrary change during the contract term," said Hadley.

The PUC took similar action in 2006 when a pizza company said its power bill nearly doubled even though it had negotiated a fixed-rate deal. The circumstances in that case were slightly different -- the pizza company's power contract got sold to a third party, which unilaterally raised rates -- but the PUC still took the matter seriously enough to push through a negotiated settlement.

In an e-mail advisory, National Power said that all customers who received the initial notice of the rate change will receive another letter advising them that the rate change has been rescinded.

The original May 6 letter, signed by company President Richard Hunter, advised customers that the rate change would have taken effect in 45 days, although the company also gave customers 10 days to cancel their contracts without penalty.

Among National Power's customers is Steve Wolens, the former state House representative from Dallas who authored the electric deregulation law that brought retail electric competition to Texas. He told the Star-Telegram that he was about a year into a 15-month or 16-month contract with the retail electric provider.

"That's my REP! I'm its customer," Wolens said Thursday.