DeAnn Walker

DeAnn Walker

Texas gets hot in the summertime. According to the National Weather Service, this summer is predicted to be hotter than usual, which means Texans are more likely to crank up their air conditioners to get through the hottest parts of the day, increasing demand across the state. When that demand combines with a supply that has recently been reduced by the retirement of several power plants, the wholesale cost of electricity in Texas could rise. That means it is time for Texans who live in areas that allow for retail competition to get their electric contract squared away before summer begins. That process is based on a few key questions:

Will prices go up?

Texans have become accustomed to below-average energy prices thanks to our state’s competitive electric market and a surplus of generating capacity. When electricity demand increases in times of lower supply, the market follows timeless economic principles and prices trend upward, signaling the need for private-sector investment in more generation. This summer is likely to be an up-cycle moment.

How can I avoid the impact

of increased wholesale

energy prices?

First of all, customers should have a contract that meets their unique needs. Our state’s retail electric providers work hard to win customer business and keep it. Under rules written by the Public Utility Commission of Texas, they are required to offer an average payment plan to any customer who is not currently delinquent in payment. Many will even customize a plan to meet individual needs. Making payments of approximately equal amounts over the course of a year in such a plan is one way to reduce the impact of higher summer bills.

When should I look into my contract situation?

Customers should take a look at their current contract’s end date as soon as possible. A fixed rate contract that expires because it was not renewed or replaced could put a customer into a month-to-month arrangement that is more “financially dynamic” than they might want. Fortunately, REPs are required to notify customers of a pending contract expiration a month or two in advance.

Where do I look for options?

The PUC sponsors a Power to Choose website where REPs can post offers. After entering their ZIP code and key criteria, people can comparison shop for plan features, company ratings and renewable energy percentages.

How do I know the best plan?

After finding a favorable plan on the PowerToChoose site, customers are strongly encouraged to “read the small print” on the PUC-required Electricity Facts Label. Those are intended to provide a side-by-side comparison of electricity plans with standardized information about contract terms, pricing, etc.

When is a good time to switch?

If research indicates it is time to change plans or providers, some say the best window of opportunity is in the two weeks before a contract is scheduled to end because early termination fees no longer apply in that time frame.

Is there anything else to be aware of this summer?

If a consumer is properly prepared with the right contract, weathering this summer’s pricing challenges should be a reasonably smooth process. If demand gets too high, ERCOT has a variety of tools at its disposal, including contracts with large customers willing to reduce their consumption during high usage periods. At times, they may call on all Texans to conserve energy, so stay aware and do your part when you can.

At the end of the day, I firmly believe there are sufficient tools in place to address the reliability of the ERCOT system, and I am confident in the power of market competition to deliver the best price and service to Texas customers over the long haul. As we head into the summer together, remember to be prepared, stay informed and make good choices.

DeAnn Walker is chairman of the Public Utility Commission of Texas, the agency responsible for regulating the state’s electric, telecommunication and water and sewer utilities; implementing respective legislation; and offering customer assistance in resolving consumer complaints. She may be contacted by emailing to Andrew.Barlow@puc.texas.gov.

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