The introduction of competition to the Texas retail electric industry, which allows customers to choose their energy provider, has made more types of consumer assistance and protection possible for vulnerable customers and those who need help paying their bills to avoid disconnection of their service. Because customers can choose providers, customers can vote with their feet and pick an energy supplier that offers expanded customer assistance, deferred payment plans, and even a voluntary disconnect moratorium. As more customers choose electric companies offering these expanded protections, competitors will be forced to follow suit by adding such protections, to avoid losing customers. And the state's Public Utility Commission, as it always has, still retains authority to order a suspension of service disconnections or other measures if prolonged heat or other conditions warrant.
It's important to remember how energy companies operated before competition was introduced. Before 2002, the old monopoly utilities (like Texas Utilities and Houston Lighting and Power) had no discretion to offer any extra level of service or protection to customers. Because their costs and revenues were regulated by the Public Utility Commission, the old utilities could only perform actions as defined in specific "tariffs," or legal documents outlining specific actions that governed their relationship with their customers.
Because these tariffs were regulated, utilities could not deviate from them, even when it would benefit customers. Thus, for example, if Texas was suffering a prolonged heat wave, the utilities could not voluntarily decide to suspend disconnecting customers, to ensure that no one lost air conditioning and was not exposed to dangerous heat. Instead, such actions could only be done under order from the Public Utility Commission. While the Commission did take temporary measures in 1998 and 2000 before competition was introduced to suspend disconnections to some types of customers, the actions were narrower in scope than the plans offered voluntarily by some competitive energy suppliers today.
Because there is now competition in the industry, electric companies don't need approval to offer customers extra levels of service, or greater protections. That allows electric companies to respond to customers' needs, and is why, last year, six electric companies voluntarily decided to suspend disconnection of service to non-paying low income and elderly customers during the summer. These energy providers offered customers extended payment plans to repay any amounts deferred over the summer, to ensure that the most vulnerable customers had electricity to combat the oppressive summer heat.
This summer, two energy providers are so far offering similar disconnect moratoriums to offer customers extra protection, and more will likely announce similar plans. Other electric companies offer expanded low-income assistance and similar flexible payment arrangements to help customers avoid disconnection during the summer -- steps that would not be possible if a strict tariff still governed the industry.
And if weather conditions call for a mandatory moratorium to protect the public health, the Public Utility Commission retains the same authority to order a suspension of disconnections under competition as it did when companies were regulated monopolies (as it did in ordering suspensions in 1998 and 2000). In fact, in 2006 the Commission ordered a summer disconnect moratorium, because the state's low-income discount program (Lite Up Texas) was not funded by lawmakers that year. Funding has since been restored, and eligible customers can save up to 30% off the regular price of electricity by signing up with Lite-Up Texas. The discount is a set amount in cents per kilowatt-hours off whatever price the customer pays, so the discount will make bills even lower if the customer shops around for a lower electric rate. Comparing offers from competitive providers to find the lowest electric rate takes only a few minutes, and is one of the simplest things customers can do to lower their summer bills.