Giv­ing power to the peo­ple

City pro­gram finds Fate res­i­dents best elec­tric­ity deals in crowded mar­ket

The Dallas Morning News - - Metro & State - By RAY LESZCYNSKI Staff Writer rlesz­cyn­ski@dal­las­news.com

FATE — For the last 15 years, Tex­ans have been told there’s cheaper elec­tric­ity avail­able be­cause state leg­is­la­tors dereg­u­lated the mar­ket. But the choices are com­plex, and gov­ern­ment of­fi­cials haven’t been as help­ful in lead­ing in­di­vid­u­als to the plug-in that works best for them.

The Fate Power Switch is unique be­cause city gov­ern­ment is do­ing the shop­ping for them.

About 1 in 6 house­holds re­sponded in March, when the city in­tro­duced the pro­gram. About a third of those ac­cepted a ser­vice provider and rate se­cured through the Fate Power Switch.

A com­po­nent of util­ity dereg­u­la­tion is the Power to Choose web­site, choose­tex­as­power.org. It pro­vides con­sumers with dozens of power com­pany op­tions with straight-up prices per kilo­watt hour for each. But those rates don’t re­flect tiered pric­ing, trans­mis­sion charges and other terms and con­di­tions. “Plan de­tails” is an­other click or, to com­pare all op­tions, dozens of clicks.

But in Fate, a Rock­wall County city of 12,000 peo­ple, all the de­ci­sion-mak­ing can be left to city of­fi­cials.

“The city ba­si­cally says, ‘Let’s make it easy on you. Just say you want in,’” said Michael Ko­vacs, city man­ager. “We’re go­ing to go to auc­tion and com­bine ev­ery­body’s load, get a bet­ter price the­o­ret­i­cally, and you can opt in if you want to.”

The 175 cus­tomers who took the ne­go­ti­ated deal in the Fate Power Switch de­but may not be enough to sway the ma­jor providers into a low­ered bun­dle price. But some­where in the open mar­ket, a smaller player may be will­ing.

So might a smaller con­sumer. Linda Bax­ter had tried four or five dif­fer­ent plans in the last 10 years and found the price per kilo­watt hour to of­ten be much higher for cus­tomers like her who use less elec­tric­ity than most house­holds.

“It’s a deal I’m glad I made,” Bax­ter said of her Fate-ne­go­ti­ated deal with a Hous­ton­based provider, Dis­count Power. “Peo­ple who use 500 or 1,000 kilo­watt hours are usu­ally charged more, and I re­ally, re­ally don’t like that.”

Bax­ter lives in Rock­wall but can use the Fate Power Switch be­cause any­one whose power is trans­mit­ted by On­cor is con­nected the same way as a cus­tomer in Fate. She pre­vi­ously made an­nual trips to the Power to Choose web­site.

“It’s not con­sis­tent. The com­par­isons are not al­ways the same. Some would charge a monthly fee, some don’t. It got very com­pli­cated,” she said. “But if you rode it to the end, it turned out to me to be a good deal. It’s very con­fus­ing, the web­site is.”

Get­ting some help

But many don’t want to spend a cou­ple hours delv­ing into the web­site, an­a­lyz­ing their op­tions. Oth­ers are put off by door-to-door sales pitches, mail­ers and TV ads.

“What we’re see­ing is that most peo­ple don’t have the time. It’s con­fus­ing, and you don’t know who to trust,” Ko­vacs said.

The city staff can’t spend all of its time craft­ing a ser­vice that only a few hun­dred use. So the city plays an in­ter­me­di­ary role. It con­tracts with a Bel­gian com­pany, Ichoosr, to do most of the ac­tual leg­work.

Ichoosr claims most of the end user’s switch­ing fee. The city’s take, about $3,500 in the first go-round, cov­ers its cost to ad­ver­tise the pro­gram through mail­ers in­serted in its wa­ter bills.

The feed­back was pos­i­tive enough for Ichoosr to look around Texas for ad­di­tional part­ners. Along with Fate, Pros­per Waco, a cit­i­zen group, is par­tic­i­pat­ing in the se­cond round of sign-ups. The win­dow is open un­til Sept. 27, and about 200 have agreed to look so far.

Be­cause Ichoosr is a pri­vate com­pany, the Power Switch is not an of­fi­cial co-op, which, like a mu­nic­i­pal power provider, is tax-ex­empt. Cus­tomers of co-ops and mu­nic­i­pal util­i­ties — Farm­ersville, Gar­land and Greenville are among cities clos­est to Fate that have them — are in­el­i­gi­ble to par­tic­i­pate.

Ad­ver­tis­ing for the Fate Power Switch claims that those who signed up in the spring are av­er­ag­ing a $336 an­nual sav­ings. Truth be told, most ev­ery­body has a lower bill this Au­gust than in the same month of 2016. That’s be­cause this sum­mer has been far cooler than nor­mal and peak grid us­age price spikes haven’t been as com­mon.

Po­lit­i­cal risk

Jamie Ratliff of Gar­land, long­time board mem­ber of the Texas Mu­nic­i­pal Power Agency, sees no fi­nan­cial risk to Fate’s ef­fort. But as a for­mer elected of­fi­cial, he won­ders what would hap­pen if a Fate Power Switch cus­tomer dis­cov­ers that a neigh­bor three doors down has done the leg­work to se­cure an even bet­ter rate.

“With the city pro­mot­ing it, I can see po­lit­i­cal risks,” Ratliff said. “They can say it’s vol­un­tary. That you made the choice and you didn’t have to. But I can come back at elec­tion time and say that you told me it was go­ing to be the low­est rate.”

Bax­ter, the Rock­wall cus­tomer, doesn’t vote in Fate. But like any Texan, she gets an an­nual crack at the open power mar­ket. As of now, she said, the Fate Power Switch and the new provider it found for her have per­formed well enough to get a se­cond look.

“I’ll look at it again,” she said. “It was a help to have some­body guide you through the process. There’s no re­ward any­more for be­ing loyal to any com­pany.”

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