Giving power to the people
City program finds Fate residents best electricity deals in crowded market
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.
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.”