What the bankruptcy of TXU’s parent means for consumers

HOUSTON — As news of Energy Future Holdings’ bankruptcy filing spread Tuesday, advocates and economists disagreed about what, exactly, it means for the company’s 1.7 million retail customers.

While regulators and the company itself have said the bankruptcy is unlikely to affect the company’s day-to-day operations or affect customers of TXU, the company’s retail arm, others aren’t so sure.

Carol Biedrzycki, executive director of Texas ROSE, an Austin-based consumer advocacy group that pushes for affordable electricity, raised concerns about the potential impact on electricity bills.

“This is a deregulated situation. What happens to these customers’ contracts?” she questioned. “The impact on the individual consumer is something that a lot of people should be concerned about.”

Sheridan Titman, a University of Texas professor who leads the school’s Energy Management and Innovation Center, maintains that TXU customers likely won’t be affected by the bankruptcy.

“My feeling is it probably doesn’t mean much for consumers,” Titman said. “They’re not going to turn off the power just because they’re bankrupt.”

Potential problems

Still, a group of 140 mostly North Texas cities served by Oncor, EFH’s transmission and distribution arm, say they’re concerned about the filing. Though they say it’s too early to know the exact impact of the move, they aren’t dismissing the potential for problems.

“No one should expect the lights to go out, but that doesn’t preclude the EFH bankruptcy from impacting Texans in other ways,” said Geoffrey Gay, general counsel for the Steering Committee of Cities Served by Oncor, in a statement.

Biedrzycki said if TXU raised rates as part of its bankruptcy, consumers could change providers. But, she added, many consumers don’t pay close enough attention to their bills to notice such changes.

Honoring agreements

So far, the company has emphasized that it doesn’t expect the bankruptcy to affect retail customers.

In a statement, Energy Future Holdings said it fully expects that normal day-to-day operations will continue during the Chapter 11 bankruptcy reorganization process, including “honoring all retail customers agreements and actively competing in the marketplace.”

A spokesman for the company said the company will continue to operating as usual and said TXU does not offer variable-rate agreements to customers. When customers’ agreements expire, they are enrolled in new contracts and notified of the rate.

The Texas Office of Public Utility Counsel is charged with representing the interests of residential and small-business utility customers. As the bankruptcy filing proceeds, it will be represented by the attorney general’s office.

“We don’t know a lot today,” said Michele Gregg, a spokeswoman for the Public Utility Counsel. “Really, all we know is what’s been represented (by Energy Future Holdings) as of now.”

Gregg said the federal court could have broad discretion to address the company’s retail business and a host of other issues that could affect consumers.