National Power-less?


Houston electric retailer National Power became the 2nd company this month (and probably the eighth ever) to have to dump its customers because of financial issues. We broke the news yesterday afternoon but here’s what some other news outlets wrote about National Power today.
To answer/clarify a few questions from readers:
Where are the National Customers going? As many as 7,000 mostly variable rate customers are going to Houston-based Amigo Energy while the balance goes to the provider of last resort. Who that will be is actually harder to say. TXU and Direct Energy are the “voluntary POLR’s” for much of the state, meaning they can pick and choose which customers (if any) they want to take. After that the customers are allocated to the non-voluntary POLR’s based on the part of the state they are in. In Houston that includes Reliant Energy as others.
What should National Power customers do? The consensus among officials we interviewed is don’t wait to get put on the POLR plan since it will likely be very expensive. Start shopping around now to look for the best rate. If you switched to another company after National said they would jack up rates but it hasn’t gone through yet, you shouldn’t worry. Your switch to the other provider should still happen.
How do I know this won’t happen to me again? This question of “when is a fixed-rate not a fixed-rate” is being tackled by the Public Utility Commission. As Platt’s reported on a recent meeting:

“… the state’s Public Utility Commission intends to begin a rulemaking to clarify the terms and conditions of service customers can expect from retail marketers, PUC spokesman Terry Hadley said on Friday. Following concerns raised by Commissioner Julie Parsley, PUC staff intends to modify consumer protection rules and present revisions to the commission sometime in July, Hadley said.”

In a memo Parsley wrote before the meeting she expressed a view that, if not fixed by PUC rulemaking could end up being codified in law during next Legislative session:

“Neither the language of the rules nor the guidance provided permit a REP to market a product as “fixed” if the REP reserves the right to change that “fixed” price based on vague and undefined criteria like changing market conditions. If a terms-of-service document specifically indicates that a product is fixed through the term of the contract, then I believe, such a claim provides added protections to customers beyond what our rules provide, and would generally control over a more general statement regarding notice for material changes. And, to the extent that a contract is marketed as “fixed,” yet the contract contains terms suggesting that the terms are something other than fixed, that contract may be deceptive and misleading.