COVID-19 subsidy losing its power
Months of deferred electric bills to come due at end of the month
The Public Utility Commission put together a COVID-19 electricity relief program in spring that provides a subsidy that would cover more than half the average residential monthly power bill for financially struggling Texans who buy power in the competitive marketplace.
But it’s still a secret, critics say, to many customers in the deregulated Houston and Dallas markets who may be eligible for the subsidy but who can’t directly sign up for it under rules of the program, which ends Aug. 31.
Regulators haven’t required retail electric providers to first notify needy customers that there is an available subsidy before moving them into payment programs that could eventually lead to disconnection.
The Texas Workforce Commission, critics say, should inform applicants seeking unemployment benefits that they could get the subsidy and provide a link to a website where applicants could get more information.
Even the group that represents interests of residential customers, the Office of Public Utility Council, doesn’t explain the
subsidy in any detail on its website.
Fewer than 4 percent of the nearly 3 million Texans who have applied for unemployment benefits since mid-March are receiving the subsidy, according to utility filings to the Public Utility Commission. Some 590,000 low-income Texans who receive Medicaid and food stamps were not automatically enrolled in the subsidy program, although they have protection against power disconnection.
“It’s failing miserably and people are being saddled with debt,” said Austin consumer lawyer Randall Chapman.
Electricity consumers have to know the “secret handshake” to enroll, Chapman said.
Texas consumers only get the help if they can’t pay their electricity bills and face disconnection of their power. Then, retail electric providers can apply for the subsidy and in most cases, continue to bill their customers for the remainder of what they owe.
The idea for the program was prompted by retail electric providers worried about racking up massive debt as local governments issued stay-athome orders and businesses closed. They worried an effort launched this spring by utility companies to voluntarily suspend disconnections for nonpayment would leave retail electricity sellers with no hammer to get customers to pay their mounting bills.
The subsidy covers about 8 cents per kilowatt hour of power, about 65 percent of the average price of residential power in Texas of 12.3 cents per kilowatt hour. Texas power consumers support the fund through a special charge of 0.033 cents per kilowatt hour, or about 40 cents per month for an average household.
Consumer advocates say retail electric providers aren’t eager to enroll customers in the program because the subsidy alone isn’t enough to cover their costs. But the program gives retail electric providers a powerful advantage.
If customers facing disconnection agree to a deferred payment plan, retail electric providers can charge them for the entire contracted rate — minus the 8 cents per kilowatt hour subsidy — and prevent them from changing to another electricity provider until they’ve paid off their balances. Consumers who miss a payment after the program ends Aug. 31 face disconnection of their electricity and can’t shift to another provider.
The program headed off a potential catastrophic financial downward spiral in the Texas electricity market when the COVID-19 pandemic landed in
March, said Bruce Stewart, president of British-owned Direct Energy Home, the third-largest electricity seller in Texas that was recently purchased by
NRG Energy in a deal expected to close by yearend. “While the program isn’t perfect,” he said, “it was developed and implemented very quickly with strong collaboration between regulators, retailers, and consumer advocates and is serving its intended and important purpose to help our customers.”
The Public Utility Commission said the emergency program is working as designed, protecting more than a half-million Texans from having their power disconnected for nonpayment during the pandemic, spokesman Andrew Barlow said. He said the commission has worked diligently to inform the public about the details, including through press releases and interviews, social media posts and information on its website.
CenterPoint Energy, the regulated utility that transmits electricity to most Houston-area power consumers, reported that 33,000 participants enrolled in the electricity relief program from April to June, according to the company's filing with the Public Utility Commission. Oncor, the regulated utility that provides power to Dallas, reported that it had registered 41,000 participants during the same three months.
Retail electric providers can ask customers who call about problems paying their bills to enroll in deferred payment plans which can include switchholds, locking them in until their bills are paid.
Consumer advocates are worried what that will mean to low-income Texans when months of deferred electricity bills begin to come due at the end of August, when the program ends and they can’t change providers if they miss a payment and their power is disconnected.
On its face, the protection looks like help, but it could deliver an unwelcome surprise for folks in another few weeks, one consumer advocate said.
“The train wreck is in clear sight,” said Tim Morstad, associate state director for AARP Texas.
The nonprofit law firm Texas Legal Services Center of Austin asked the utility commission in March to join with the Texas Workforce Commission to provide new applicants for unemployment compensation with a web link to enroll in the electricity program, according to regulatory filings.
The Texas Workforce Commission said the program is not its responsibility. It is not specifically for job seekers but for Texans generally, agency spokesman James Bernsen said.
The Office of Public Utility Counsel said it has promoted the electricity relief program on its website, weekly social media posts and on its consumer hotline.
Public Counsel Lori Cobos said the group is focused on ensuring that Texas residents in qualifying households continue to have reliable electricity service during the pandemic.