SerpApi.Org
Memo to Laurel Peltier, retail energy expert
From: The Watchdog
Laurel, I read your recent study on how Texas electricity companies deceive customers and nearly fell out of my chair.
You blew up the system.
Good for you.
I'll include your findings in Part One of my series helping newcomers adjust to moving to the Lone Scam State.
Imagine arriving amid the chaos of a new home, new job, new school and new everything. Then someone tells you to choose a retail electricity plan.Where do you even start?
Here's the first lesson I'm borrowing from your study: Most Texans overpay for electricity.
They just don't know it. You estimate that two years ago 11 million Texas families paid a joint total of $4 billion - or $480 a year for a family - in overcharges. That would not have happened if they had stayed with their monopoly electric companies and not moved to retail companies.
Yes, the same retailers who promised lower prices because of a competitive market place. It didn't work.
As you put it, "These ratepayers losses are not the result of rising energy supply costs, renewable mandates, or poor consumer decision-making. They are the predictable outcome of a market structure that allows for no guardrails to prevent retail energy suppliers from exploiting customers."
How do they exploit us?
You show how some contracts go on up to five pages. When a contract expires, the low introductory rates go up. It's in the small print.
You say that most customers are "inattentive." You write, "About 75% of residential customers do not re-shop."At that point, fixed rates can suddenly change to higher variable rates. "Notices are sent - but rarely understood or acted upon," you write.
But to get to that favored point, companies they must catch new customers? They use the allure of low introductory rates, a short-term discount, questionable claims of using renewables and gift cards as other sign-in incentives.
Another troubling finding in your study: Electricity companies deliberately target low-income customers through door-to-door sales. Then comes this devastating charge. In a key paragraph, you write, "This is not market failure by accident. It is market design rewarding opportunism."
In another stark takedown of the system, you write, "Retail suppliers do not compete to deliver to the lowest long-term price. They compete to capture customers during brief promotional windows and then monetize those relationships through deceptive autorenewables, uncapped variable rates and opaque green offerings. In this environment, disclosure alone cannot protect consumers, and caveat emptor - ‘buyer beware'- is not a viable public policy for an essential service."
Your study says Texas could fix the system by imposing rate caps, eliminating exploitative sales practices and restoring regulatory oversight.
Laurel, you ask if deregulation is worth it? Your answer seems clear: no.
The promise of eliminating monopolies and fostering competition may have worked in the early days of deregulation 20 years ago. But not anymore.Two companies control about 70% of the marketplace. Vistra owns TXU. NRG owns Reliant.
We both agree that not only is the system unfair. It's broken.
"And no one in power wants to do anything about it," you told me.
How does this get fixed?
"Texans must band together and build a big coalition," she said. It's worked in other states which have attempted to fix similar problems.
In the end, though, "It takes a very brave legislator to do the right thing and go up against such well-capitalized companies. It's not an easy thing."
Thanks Laurel. If I find one, I'll let you know.
Read this story on dallasnews.com
