Texas Power Consumer Complaints On The Rise, Reports TCAP

A recent analysis by the consumer advocacy group Texas Coalition for Affordable Power (TCAP) shows that consumer complaints filed with the state’s Public Utility Commission (PUC) have risen again in 2014, after four years of decline.

In 2002, Texas became a “Power To Choose” state, and deregulation of the electric utility sector began. Following its commencement, consumer complaints spiked, going from an annual total of more than 2,000 in 2001 to 8,500 the following year, and 17,250 in the first full year of deregulation. In 2009, the total number of complaints was still nearly 16,000, but a decline began that bottomed out at 7,129 in 2013, a considerable drop from the post-deregulation spike but still a 300% increase over pre-deregulation totals. In 2014, the figure has risen to 7,608.

The downward trend for complaints in the prior few years could be attributed to customers’ becoming more familiar with navigating the different available plans and the process of switching providers to get the best fit, thereby cutting down on dissatisfaction. It could also simply be because low prices for natural gas kept electricity rates correspondingly low, and people are less likely to complain if they don’t feel they are paying too much. JD Power and Associates, a company that rates customer satisfaction, issued a report last year showing that customer satisfaction with power providers was at an all-time high since deregulation, and that customers in deregulated areas of Texas were more satisfied than customers in areas of the state that were not yet deregulated. It’s easy to reason that opening up the field to retail competition would tend to encourage good customer service, lest people flock to another provider.

So what explains the uptick in complaints, for the first time in four years? One culprit, single-handedly responsible for 7.5% of complaints, is “switch-holds”, a controversial practice instituted in 2010 that froze customers’ ability to switch to another power company until they settled outstanding bills owed to their current provider. Also, 11% of the complaints filed have been about meters. This figure may correlate to the rollout of new digital “smart meters”, as complaints tend to surge when new rules or equipment are introduced, according to a PUC spokesman. Other possible factors, according to industry representatives, may be the growing population of Texas and the ease of filing complaints online, but TCAP still notes that complaints are considerably higher now than before deregulation and notes that the situation is still “worth monitoring”, as it seems customers are still showing frustration with the market.

See Also: Texas Electricity Providers Perform Well In Survey



Complaints In Texas Electricity Market Drop Again

For the fourth consecutive year, Texans are complaining less about their electricity providers.  This is according to findings published by Texas Coalition for Affordable Power.

There are number of factors that could be contributing to this steady decline in complaints.

Texans are becoming more and more familiar with how to compare electricity rates and shop for a better deal.   The also understand the terms of the plans better after years of deregulation in Texas.  This familiarity with how to shop and the process of switching providers leads to better experiences for consumers and, consequently, fewer complaints.

Electricity rates in Texas have been considerably lower over the past few years.  This is due largely to a sustained dip in natural gas prices.  Most electricity in Texas is produced from natural gas.  This leads to a strong price correlation between the two.    Consumers who feel they are paying too much are more likely to complain.

Complaints are now at their lowest level since deregulation began in the Texas electricity market.  The first full year of deregulation saw a total of 17,250 complaints to the PUC.  In fiscal year 2013 that number stood at 7,129.  As the market matures and consumers and market players get more familiar with the process, complaints continue to decline.

This follows another recent report that confirms that Texans are more satisfied than ever with deregulated electricity.   The report by JD Power and Associates showed that Texans in deregulated areas of the state showed a higher level of satisfaction than those who lived in areas of the state that have not yet been opened to retail competition.

To file a complaint with the Texas PUC, follow this link: http://www.puc.texas.gov/consumer/complaint/Complaint.aspx

Texas Gets a New PUC Commissioner

The Public Utility Commission is once again fully staffed following Texas Governor Rick Perry’s appointment of Brandy Marty, a former Perry staffer, to fill a vacant seat.  The three-member panel has been shorthanded since the resignation of Rolando Pablos in March of this year.

Marty has a law degree from St. Mary’s University in San Antonio and a bachelor’s degree from the University of Texas in Austin.   She has worked in the Governor’s Office since 2007 and in March of 2013 she was named a Perry’s Chief of Staff.  Interestingly, this was on the same day as Pablos’ resignation from the PUC.

Marty comes in at a critical time for the Texas electricity market.  As the state struggles to find ways to address looming power shortages, the PUC has some critical decisions to make about the structure and polices of the Texas market going forward.

One of the most critical issues on the table is the proposal to convert Texas from a demand only model to a capacity market.  Under a capacity market, producers would be paid simply for building out additional capacity and having it available for use by the grid.  Under the current structure, producers are paid only when the electricity they produce is used.   Donna Nelson, the Chair of the Commission seems to open to the idea of a Capacity Market.  Marty could be the swing vote in favor or against a capacity market.

The PUC has recently taken other steps in the effort to incentivize new production of energy capacity in the state.  This includes a substantial increase in the state’s cap on the wholesale price of electricity that producers are able to charge during times of peak demand.

See Also: Texas Electricity Rates Going Up – Again
See Also: Will Texas Switch To A Capacity Market For Electricity?