Blog: New Market Players in Dispute with Texas Retail Electric Providers

New Concierge Services in Free Market dispute with Texas Electric Retailers.

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New “concierge” websites have begun crying foul at what they call unfair treatment by retail electric providers — and the thorny dispute now has spilled over at the Public Utility Commission.

Concierge companies claim they deliver savings by sorting though the sometimes maddeningly complex deals customers face in the state’s deregulated electricity market. In exchange for a fee, concierges purchase power on behalf of residential customers and then switch them when better deals come along.

But some retail electric providers now refuse to sell power to customers who use concierge companies. REPs say they’re acting on behalf of consumers. The owners of the concierge websites say REPs are acting out of self-interest, and by interfering with concierge services REPs are interfering with the free market.

Reporter L.M. Sixel highlighted the simmering market debate in a Houston Chronicle article.

The issue came up during a May 1 meeting of the Public Utility Commission amid a debate over proposed rules for electricity brokers. The agency’s three commissioners adopted the broker rules with a stipulation that REPs could continue refusing service to customers who buy power through concierge websites.

The commissioners appeared to harbor concerns, however, and left open the possibility of revisiting the issue later. “It just doesn’t feel right to me,” said PUC chair DeAnn Walker.

HOW CONCIERGE SERVICES WORK

Concierges typically charge customers a flat monthly free or charge them on a per-kilowatt-hour basis.  Houston Chronicle journalist L.M. Sixel — describing  concierges in a May 7 article — noted that “their computer programs cut through the confusing multi-tier plans, bill credits and debits, and free nights and weekend arrangements offered by retail electricity sellers, potentially saving shoppers hundreds of dollars a year.” 

But the PUC’s commissioners appeared to accept REP arguments that free markets work best when buyers and traders come together willingly, and therefore market rules should not force REPs to unwillingly serve customers who use concierge services.  Some REPs also argue that they should have authority to demand power-of-attorney agreements from any broker who purports to represent individual customers. Electricity brokers, in filings at the PUC, counter that such requirements would go beyond those faced by insurance and real estate brokers.

“In the end, the commission said it will not tell retail electric providers how to determine if brokers have legal authority to act for their clients (and) the commission also will not require retail electricity providers to accept enrollments from electricity concierge companies,” wrote Sixel.

You can read more about the PUC’s new broker rules here. And to see L.M. Sixel’s article about concierge websites, go here.

 

— R.A. Dyer