Electricity complaints soar with Texas deregulation - study

Source: Recharge Texas

Electricity complaints have skyrocketed under the Texas electric deregulation law -- from fewer than 2,100 received each year by the state’s Public Utility Commission to an average of more than 12,000 under deregulation, according to an analysis by nonprofit RechargeTexas.com

Texans have lodged more than 800 percent more electricity complaints on an annual basis after retail deregulation than they did before deregulation, the analysis shows. The most common complaint relates to billing, although discontinuance and provision of service complaints also rank high. 

RechargeTexas.com is a service of the Texas Coalition for Affordable Power, a coalition of cities that promote policies to make electricity more affordable. 

Jay Doegey, TCAP president, said the colossal jump in complaints reflects continued frustration with the deregulated electricity market in Texas. 

“We may have dozens of companies competing for customers under the state’s electric deregulation law, but unfortunately that has not translated into better service,” said Doegey. “Contract confusion, high prices and other problems unfortunately are all too commonplace. It’s important that our PUC commissioners and state lawmakers do all they can to ensure that consumers come first in this market.” 

Texans unhappy with their electric service have a right to file complaints with the PUC, which is charged with investigating them within a specified period. The PUC began collecting complaint data after the establishment of its Office of Customer Protection in July 1997. 

The analysis shows that complaints from electricity consumers lodged with the Texas Public Utility Commission initially spiked at the end of the 2001 calendar year, which was the year the state embarked on what is now remembered as a problem-plagued deregulation pilot project. Complaints remained high after the retail electric deregulation began in earnest on Jan. 1, 2002. 

In the 2002 fiscal year, the PUC received more than 8,500 complaints relating to electricity. That’s in contrast to the previous fiscal year in which the PUC received fewer than 2,100 complaints. During the entire period of deregulation, complaints against electric companies filed with the PUC have never dipped to below 7,700 per fiscal year. 

RechargeTexas.com analyzed PUC electricity complaint data for the 1998 through 2010 fiscal years. The agency said it discarded pre-2003 data under its documentation retention policy and so estimates for those years were obtained through journalistic accounts and through an analysis of charts that appear in PUC annual reports. RechargeTexas.com obtained precise 2003-2010 fiscal year complaint data under the Texas Open Records law. 

The agency fielded an estimated 684 complaints against electric companies during the 1998 fiscal year, an estimated 1,349 complaints during the 1999 fiscal year, an estimated 1,168 complaints in the 2000 fiscal year and 2,062 complaints for the 2001 fiscal year. That averages to 1,316 annual electric complaints filed with the PUC for the years prior to deregulation. By contrast, consumers filed with the PUC an average of 12,013 complaints against electric companies for fiscal years after the start of deregulation. 

The plurality of complaints submitted to the PUC over the last two fiscal years relate to electricity bills. The relatively high number of billing complaints is unsurprising given that electric prices have increased in Texas by more than 40 percent since the adoption of the deregulation law. That’s a greater percentage increase than that registered nationwide. Likewise, average electricity prices in Texas are higher than prices in adjoining states. 

“We can do better,” said TCAP president Doegey. 

Under the PUC’s complaint process, customers can file a complaint against a company with the agency. The PUC then makes an inquiry with the company, which has 21 days to respond. A PUC investigator evaluates the company’s response to determine whether it failed to follow the law.

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