State mulls future of power price website
Regulators make changes but wonder if agency ought to be showing prices at all
State regulators make modest changes to the Power to Choose website that lets consumers compare electricity rates, but they said the state could stop operating the site if its efforts to make pricing less confusing fail.
State regulators on Thursday adopted modest changes to the electricity shopping website Power to Choose in an effort to protect consumers, but raised the possibility that the state could stop operating the site if its efforts to make electricity pricing more transparent and less confusing fail.
At a regular meeting of the Public Utility Commission, commissioners noted that retail electric providers already are trying to find ways around new rules aimed at ending pricing gimmicks that lure consumers into power plans that may end up costing much more money than advertised.
“If the answer is that two years from now none of these things work, I think we need to reconsider the wisdom of a government agency maintaining a commercial website,” commissioner Arthur D’Andrea said.
The Power to Choose site, created to help find the best electricity deals, has long attracted complaints from consumers because of the overwhelming numbers of plans and variations, misleading pricing, confusing
terms and potential traps. In recent months, commissioners have joined the criticism, warning electricity retailers to make their offers easier to understand or face new regulations.
On Thursday, commission chairman DeAnn Walker suggested that one way to avoid confusion would be to drop pricing from the site altogether, essentially leaving a list of retail electricity providers that consumers can contact and research.
Two years ago, the commission floated the idea of dropping the ability for consumers to shop prices on Power to Choose. Then, Direct Energy, the third biggest seller of electricity in Texas, favored removing pricing information because the company felt it was no longer necessary.
“Customer engagement in the competitive market is high, and there are many more alternatives to the shopping function of the Power to Choose for consumers to go for comparison shopping,” according to comments submitted by Direct Energy,
which owns the brands First Choice Power, WTU Retail Energy, CPL Retail Energy and Bounce Energy. Direct Energy advocated converting Power to Choose to a purely educational website.
The commission did not act on Walker’s suggestion. But the idea didn’t sit well with the Texas Coalition for Affordable Power, a group that buys electricity on behalf of municipal governments in Texas. The website’s shopping function is especially important, the group’s policy analyst R.A. Dyer said, because the whole point of electricity deregulation was to provide consumers the opportunities to find lower rates than under regulated utility monopolies.
“We believe that without it Power to Choose loses much of its relevance,” he said. “The shopping function helps consumers, supports the competitive energy market and it deserves continued support — now and in the future.”
On Thursday, the commission took aim at an industry practice that advertises low rates but jacks up those rates by as much
as 10 times if customers usage goes above a certain threshold such as 1,000 kilowatt-hours per month.
Commissioners approved adding a new screening filter to the Power to Choose website so such plans don’t automatically appear as low-cost options when customers search for electricity providers. The site already allows consumers to filter plans according to several criteria, including customer ratings.
Retail electric providers tailor their electricity offers to land on the first page of Power to Choose by showing a low average price at the 1,000-kilowatt usage level. The plans may benefit some customers who can stay below the threshold, but for most customers, some plans can end up costing significantly more than the advertised average price over the course of the contract.
NRG Energy said it supports the commission’s decision to filter out misleading plans with unrealistically low prices. One of NRG’s brands, PennyWise Power, offered those kind of plans to stay competitive in the market, but when the commission
began looking into such offers this summer, NRG removed its PennyWise plan from the site, spokeswoman Pat Hammond said.
She said NRG applauds the changes the commission enacted and believes they will make the site easier for consumers to use and understand.
The commission also approved limiting the number of plans retailers can offer on Power to Choose to prevent flooding the shopping site with offers that are barely distinguishable from one another and adding to customers’ confusion. Some companies have more than 30 plans on the shopping site.
The commission will also make how-to videos and other guides to help consumers through the shopping process.
Walker directed commission staff to continue to work on ways to improve Power to Choose. At the moment, however, she said that she believed the changes adopted Thursday are a good step forward.