The competitive Texas electric market doesn't just give customers more protections compared to the old monopoly system; it gives customers more protections compared to customers who live in areas where municipalities or electric cooperatives provide service.
As noted last week, competition doesn't bind Texas electric companies to rigid tariffs, meaning they can provide higher levels of customer protection and service in order to attract business and better serve customers. That couldn't happen in the old monopoly system, since every action and cost was set ahead of time by administrative rule. It means that today, competitive energy providers can offer extra levels of protection -- like voluntary moratoriums on disconnection of service during the summer, even above what the Public Utility Commission rules call for.
However, nearly all Texas municipal utilities and electric cooperatives are not open to competition. They are also not under the jurisdiction of the Public Utility Commission, meaning they do not have to follow the numerous customer protection rules applicable to the competitive electric market.
That distinction became apparent last week at the Public Utility Commission's public meeting, in which Commissioners discussed the various protections in the competitive market helping customers avoid disconnection of service during the summer, so customers aren't exposed to dangerous heat without electricity and air conditioning. The Commissioners noted that the competitive market does not allow companies to use a "hard disconnect" -- that is, a disconnect that stays in place until the customer pays back their past due balance in full.
Instead, under competition, customers who have been disconnected can always have service turned back on by simply choosing another electric company, without having to pay back their balance to their old energy supplier. This means customers who are disconnected can get electric service restored faster, and have more time to pay back their past due balance while still getting their service turned back on.
However, many municipals and cooperatives do have "hard disconnects" -- meaning customers whose service is disconnected cannot get service turned back on until they pay their past due bill in full. This can leave customers without service for weeks or months as they try and scrape together money to pay their past due bill. The Public Utility Commission noted that Austin Energy and Pedernales Electric Cooperative, which do not offer competition, both have hard disconnects.
That means in areas without competition, customers are at a greater risk of disconnection, and face a tougher time in getting service restored if they are disconnected. With competition, electric companies have an incentive to raise their level of customer protections and service, to attract to new customers and build customer loyalty. It means customers are better off when companies compete for their business.