PUC approves rules requiring electric providers to offer deferred payment plans

Correction: Electric customers qualify for deferred payment plans under Texas' new rules if they haven't bounced more than two payments in the last 12 months. Also, the Retail Electric Provider Group said the new switchhold rule doesn't go far enough. Both were incorrect in this story, but have been corrected.

Texas regulators voted Wednesday to require retail electric providers to offer deferred payment plans to customers in cases of extreme weather and medical need but allow them to block customers from switching providers if they haven't paid their bills.

Consumer advocates said the provisions will lead to more electricity disconnections for seniors and ill people.

Advocates also questioned whether the Texas Public Utility Commission can bar electric companies from signing up customers dropped by other providers.

"We're going to explore legal avenues to rein in what we see as an abuse of their power," said Tim Morstad in AARP's Austin office.

The Retail Electric Provider Group, representing 17 Texas electric providers, said the new rules are fair.

They "significantly expand protections for electricity customers who need help paying for electricity during the hot Texas summers and extremely cold winters when bills can be very high," said Catherine Webking, a lawyer for the group.

Regarding the provision requiring that customers pay up before switching providers, Webking said: "If you use a product or service provided by a company, it's only right that you pay for it. If you don't, then the cost for everyone else that does pay goes up."

The new rules, approved unanimously by the three-member commission, go into effect June 1, PUC spokesman Terry Hadley said.

Under the rules, electric companies must offer deferred payment plans upon request when billings come due in extreme weather, such as county heat advisories in July, August or September and freezes in January and February, disaster declarations by the governor or when a customer was underbilled.

The rule broadly defines customers eligible for deferred plans: low-income people on the state's Lite-Up discount plan, those who demonstrate "critical" or "chronic" medical need, and otherwise creditworthy customers who have "expressed an inability to pay."

"It's not quite everybody," Hadley said.

Customers who say they can't pay qualify if they haven't been disconnected or bounced more than two payments during the preceding 12 months, have been a customer at least three months, have "sufficient credit" and have a "satisfactory history" of payments.

Current Texas rules don't require electric companies to offer deferred payment plans.

Rules also prohibit disconnections for 48 hours after the National Weather Service issues a heat advisory, for 24 hours after temperatures are at or below freezing during the winter, and on Saturdays or Sundays.

The new rule allows electric companies to place a "switch hold" on customers who enter deferred payment plans, prohibiting them from changing providers until the balance is paid.

Proponents of switch holds said some customers open accounts, pay the deposit, then jump to new providers while still owing money.

AARP's Morstad said switch holds will likely "poison existing flexible payment plans that have helped people keep the lights on ... and we're concerned the decision will lead to dangerously long electric disconnections."

AARP's reasoning: Customers who are disconnected for nonpayment can switch to other companies and get reconnected "relatively quickly," Morstad said.

"We feel the PUC overstepped and doesn't have the authority to prevent a customer from switching electric providers," he said.

Carol Biedrzycki, executive director of the Texas Ratepayers Organization to Save Energy, agreed.

"Sometimes, REPs are bad actors and the customer is in a jam because the REP is not following rules," Biedrzycki said. In such cases, she said, "refusing to pay a business is a legitimate response."

She said the new application procedures for determining medical need will likely boomerang on customers and lead to more disconnections.

"In the past, they've never had clear steps a company could take to disconnect somebody," Biedrzycki said. "Now the rule does outline those steps. We're concerned the companies will follow those rules and will disconnect those people."

Webking said the switch hold rule doesn't go far enough.

"It only eliminates the loophole for those who enter into longer-term payment plans," she said. But she called it "a reasonable compromise."

Scott Nishimura, 817-390-7808