As noted a few weeks ago, one of the benefits of competition in the Texas electric industry is that customers don't have to pay for wrong decisions or bad investments made by electric companies. Since customers can choose their energy provider, they can switch to a new energy supplier if their current provider tries to pass on extra costs from a bad investment to customers, instead of making shareholders bear the cost of a mistake.
Unfortunately, not all areas of Texas are open to competition. In these areas, including at municipal and cooperative utilities, customers are still on the hook for paying for any unwise decisions made by their monopoly utility.
That appears to be happening at city-owned Austin Energy, where all customers may soon be forced to pay for the city's renewable energy program, whose costs until now have been paid only by customers opting into the program.
Austin Energy's latest green energy product, for which it has already bought supplies, isn't selling as well as expected. The latest "GreenChoice" offering has been on the market seven months, but only about 1 percent of it has sold.
"If the latest GreenChoice offerings do not sell, their cost will eventually show up in the bills of all Austin Energy customers anyway, officials say," the Austin American-Statesman reported. Austin Energy's rates for city residents are not regulated by the Public Utility Commission, and can rise as high as the utility and city desire.
According to the Statesman, "Some critics say Austin is overcharging for its wind, thereby undercutting GreenChoice. Mike Sloan, president of local renewable energy consulting firm Virtus Energy, says the city has overestimated various costs and packed in hidden fees."
Customers, however, are left at the mercy of Austin Energy, and the city council. Austin residents do not have a choice in their electricity company, and can't vote with their feet if dissatisfied with how Austin Energy is running things. Customers who don't want to pay for Austin Energy's lagging green power sales can't avoid paying for the utility buying too much green power, if the utility and city council decide to put those costs into everyone's rates. Customers who think the cost of Austin Energy's GreenChoice product is too high and packed with hidden charges can't pick an alternative renewable energy plan that's cheaper.
Texans in parts of the state open to competition are protected from paying higher bills due to a company buying too much green power, while competition keeps renewable power rates low, and free from hidden or inflated charges.