Group Claims Oncor Unnecessarily Charged Fees to Texas Electricity Consumers

According to a report commissioned by a group called Texas Coalition for Affordable Power (TCAP), Oncor has collected around a half billion dollars in fees from Texas electricity ratepayers in the past several years in order to pay federal income taxes.  This money, according to TCAP, was never actually paid to the federal government.  Texas regulations allow utilities such as Oncor to collect fees from customers to pay federal income taxes but don’t actually require the fees to be used for that purpose.

Texas is a “Power to Choose” state which means that consumers in most parts of the state are free to select their Retail Electric Provider.  However, the transmission utilities, including Oncor, are still regulated monopolies.  They are responsible for delivering electricity to consumers regardless of who the retail provider is.  The electric company whose name appears on the bill charges consumers pass-through fees that go back to Oncor to pay for the cost of delivering the power.

Oncor is owned by the same parent company that owns the retail electric provider TXU.  The parent company, Energy Future Holdings (EFH), has been in financial trouble since an ill-fated leveraged buyout in 2007 left the company with an unsustainable amount of debt.  The buyout amounted to a massive bet on the direction of natural gas prices by a group of large investors.  Soon after the buyout the bottom feel out of natural gas prices and never recovered.

As a result EFH has been losing money since 2008 and consequently has not paid any federal income taxes.  According to the report, the money collected by Oncor ostensibly to pay federal income taxes has simply gone into the pockets of EFH and used to help service their massive debt payments.  The report further contends that since EFH appears to be heading towards bankruptcy or some other form of restructuring, the money collected for taxes will likely never be paid to the federal government.

See Also: A New Fee On The Electric Bill of Dallas / Fort Worth Customers


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