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The Watchdog: Confusing electricity plans can leave Texans overpaying.<\/p>\n
Tom Fox\/Dallas Morning News<\/p>\n
Memo to Laurel Peltier, retail energy expert
From: The Watchdog<\/p>\n
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Laurel, I read your recent study on how Texas electricity companies deceive<\/a>\u00a0customers and nearly fell out of my chair.<\/p>\n Article continues below this ad<\/p>\n I\u2019ll include your findings in Part One of my series helping newcomers adjust to moving to the Lone Scam State.<\/p>\n Imagine arriving amid the chaos of a new home, new job, new school and new everything. Then someone tells you to choose<\/a> a retail electricity plan.Where do you even start?<\/p>\n Here\u2019s the first lesson I\u2019m borrowing from your study: Most Texans overpay<\/a> for electricity.<\/p>\n They just don\u2019t know it. You estimate that two years ago 11 million Texas families paid a joint total of $4 billion \u2014 or $480 a year for a family \u2014 in overcharges. That would not have happened if they had stayed with their monopoly electric companies and not moved to retail companies.<\/p>\n Article continues below this ad<\/p>\n Yes, the same retailers who promised lower prices because of a competitive market place. It didn\u2019t work.<\/p>\n As you put it, \u201cThese\u00a0ratepayers 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.\u201d<\/p>\n You show how some contracts go on up to five pages. When a contract expires, the low introductory rates go up<\/a>. It\u2019s in the small print.<\/p>\n Texas’ electricity mess goes way beyond the devastating 2021 winter storm. The Watchdog explains how deregulation, ERCOT, bailouts and confusing plans left Texans paying for past mistakes.<\/p>\n George Walker IV\/The Associated Press<\/p>\n You say that most customers are \u201cinattentive.\u201d You write, \u201cAbout 75% of residential customers do not re-shop.\u201dAt that point, fixed rates can suddenly change to higher variable rates. \u201cNotices are sent \u2014 but rarely understood or acted upon,\u201d you write.<\/p>\n Article continues below this ad<\/p>\n 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,\u00a0questionable claims of using\u00a0renewables and gift cards as other sign-in incentives.<\/p>\n<\/p>\n