*** Updated 3/25/2020*****************
The Texas PUC Chairman DeAnn Walker has put forth a proposal to assist Texans who are having trouble paying their electricity bills during the Covid-19shut down. The plan also has provisions for cushioning the impact on retail electricity providers and helping to keep them solvent during a moratorium on disconnects.
The proposal would replace the patchwork approach by the local utilities (TDUS) who have separately committed to suspend disconnects already. If adopted in it’s proposed form, the plan will prevent all retail electricity providersin electric choice areas in the state of Texas from disconnecting residential customer for non-payment for the duration of the state of emergency declared by Governor Abbott.
The plan would reimburse electricity providers at a fixed rate for electricity they provide to residential customers who are not able to pay their bills. This will be funded by a new pass through fee charged by the TDUs. This would ultimately flow through to all electricity customers including residential and business electricity users.
Most of the largest electricity providers in the state of Texas have announced that they are suspending disconnects due to non-payment at this time.
- The Texas PUC this week encouraged all Texas electric companies to suspend disconnects.
- TXU is extending payment due dates and waiving fees. They are also reducing down payments and offering to spread balances over multiple installments.
- Reliant Energy and its sister brands including Cirro, and Green Mountain energy have announced similar efforts.
- The distribution utilities responsible for delivering electricity to Texans have suspended disconnects for non-payment until further notice during the coronavirus outbreak. These include Oncor, which maintains he powerlines and is responsible for electricity delivery for the Dallas Fort Worth area and other parts of the state.
- Centerpoint in the Houston area has suspended disconnects.
- AEP Texas and Texas-New Mexico Power has also suspended disconnects at this time.
Impact on Electricity Providers in Texas
The decision to suspend disconnects, however, could have a large impact on the Texas electricity market. Retail electricity providers in Texas must pay for the electricity they provide end users by purchasing it on the wholesale market. If a substantial percentage of customers fail to pay their electricity bills, the electric providers could run out of money and fail. This could lead to higher electricity rates for all Texans.