The landscape of the Texas electric market will soon be changing for residential and small business customers, as the Public Utility Commission is a step closer to finalizing sweeping rules changes meant to add to consumer information and protection.

During a PUC meeting last week, the Commission put the finishing touches on revising rules that set requirements for retail electric providers to disclose pricing and other important information to customers; how they label their products; and what notice customers are given when their product is about to expire.

The biggest change that will be readily apparent to consumers is a new, PUC-determined separation of products.Currently, customers can choose from a wide variety of fixed-price products and variable-priced products, with a host of "hybrid" products in between, combining elements of both basic types.

In order to standardize the definitions of each product type, and to make sure customers know what they're buying, the PUC is about to set specific rules for each product.Although the Commission is still working on final language for the rules, the PUC agreed last week to create three types of products for the Texas retail electric market :

  1. A "fixed rate" product:A fixed rate product would include a price for each month of the contract term that is the same throughout the contract term, except the price may change due to changes in fees from the local wires company (like Oncor) who delivers power, the state's power grid manager (called ERCOT), or other new government fees.Fixed rate products would have to be at least three months long.
  2. An "indexed" product.An indexed product could vary each month, and would be linked to a defined, publicly available index, such as the cost of natural gas, or the cost of power in the wholesale market.
  3. A "variable-priced" product.Like an indexed product, a variable-priced product could have a rate which changes month to month.However, unlike the indexed product, which only changes due to changes in another commodity that the product is linked to, a variable product could change at the discretion of the electric company .Variable-priced products could only be month-to-month, because of the possible price changes customers could experience.Furthermore, electric providers will have to inform residential customers of the historical prices for variable-priced products.

Customers should start seeing the new product labels in the electric market in about five months, as electric suppliers are given time to change their contracts and other materials to conform to the new rules.

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