By: L.M. Sixel |
A state-sponsored website used by millions of Texans to shop for electricity could be on the chopping block, a move consumer watchdogs say could leave consumers with fewer choices and bigger bills.
Texas Rep. Jared Patterson, a freshman Republican who represents Denton County, wants the Public Utility Commission to drop Power to Choose, the website introduced two decades ago when Texas deregulated the electricity industry. Patterson has introduced a bill in the Legislature that would eliminate the website that compares dozens of electricity plans, arguing that the government shouldn’t be competing with private businesses.
“Government doesn’t offer pricing comparison sites for groceries or car tires, and shouldn’t for electricity rates either,” said Patterson.
Patterson is director of energy services at Rapid Power Management, an electricity brokerage firm based in Carrollton that buys electricity on behalf of manufacturers and commercial clients.
But analysts say that Power to Choose provides transparency to the electricity buying experience that has become so complicated an entire cottage industry has developed that helps consumers sort through the offers. Retail electric providers don’t have to pay commissions to be listed, so they can offer lower prices to encourage customers to sign up.
Some of the rock-bottom deals are only offered on Power to Choose. They don’t appear on the websites of retail electric providers or for-profit electricity brokers, said Fred Anders, the founder of Texas Power Guide in Houston, a website that uses Power to Choose to calculate the best deals for consumers based on their energy use.
“I can’t image what the market would turn into with it,” he said.
Power to Choose is also the place where small retail electricity providers without much of a marketing budget can offer competitive plans to attract customers they might not have reached any other way. Offers from smaller providers put pressure on the larger ones to remain competitive, one retail electricity provider said.
“If Mr. Patterson is really about promoting competition, he should welcome a site like Power to Choose,” said Joshua Pesikoff, president and CEO of retail electricity provider Infuse Energy.
The free website is also where the biggest retail electricity providers can showcase their offerings.
“It fills a vital role in the Texas competitive market,” said Pat Hammond, spokeswoman for Houston and Princeton, N.J., based NRG Energy which controls nearly one-third of the retail electricity market. NRG’s brands include Reliant Energy, Discount Power, Pennywise Power and Cirro Energy.
But Direct Energy, which has about 10 percent of the retail power market in Texas, said the shopping website isn’t needed anymore. Patterson, meanwhile, criticized Power to Choose for the marketing gimmicks that many retail electricity providers use to lure customers into believing they’re getting a good deal. The Public Utility Commission cracked down last year on many of the abuses, but Patterson said its just a matter of time until retailers find another way to game the system.
“I don’t think it’s as accurate as people think it is,” he said.
Ed Hirs, energy economist at the University of Houston, suggested that Patterson was more interested in acting on behalf of himself and the electricity industry in which he works than looking out for consumers.
Hospitals have to display their prices beginning Jan. 1, Hirs noted, and the Trump administration has proposed a rule requiring drug companies to tell consumers how much it costs to buy the drugs featured in television advertisements.
“So is requiring transparency a bad thing?” asked Hirs.
Patterson rejected any notion there might be a conflict of interest in offering his bill, noting that he represents industrial and commercial electricity shoppers, not residential buyers. “It has nothing,” he said, “to do with me.”