Will a ban on electric disconnects really help customers?

Patricia Dolese, a former Public Utility Commission official who now consults retail electric providers, e-mailed a few thoughts to us on the flip-side of recent calls for a stop to summer disconnects for customers facing high bills.

Disconnect moratoria do not help customers, they merely allow customers to dig themselves into a hole, from which many of them will not emerge. In the end, the customers will likely end up without power and will owe their retailer a large bill. While these customers may be able to establish service with a different REP by paying a deposit (that costs less money than the amount they owe to the retailer that disconnected them), in the end, it’s all of us who pay.”

Why? If REPs are continually asked to cover the bad debt expense created by these types of moratoria, they do so by raising the rates that all of us pay.
“By forcing retailers to absorb even more losses by the imposition of disconnect moratoria, all that will happen is we will further shrink the field of retail competitors to the large corporations that have the funds to own generating assets and can absorb losses from their retail operations. Is that the kind of competition we want?”

She’s referring here to the recent announcement by PNM Resources that it would be selling its retail electric business in Texas (the fourth largest) because of poor performance. Her message to us also came just shortly before it was annoucned Cirro Energy (with about 52,000 customers) would be purchased by natural gas and power giant Dominion.
Dolese goes on to say that rather than a disconnect moratoria there should be more calls to use the System Benefit Fund we all pay into on our bills (it may or may not be itemized on yours) for the “one-time bill payment assistance program” that was included in its mission. The Texas Legislature has opted to use excess funds for general revenue purposes, but Dolese said they would be better used on ratepayer assistance.
The PUC meets today but the moratorium issues does not yet appear to have been added to the agenda. That can change, however.

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