Can electric companies do that?

We noted in a story Sunday that it might be a good time to reconsider your current electric plan. But a reader pointed out a potentially costly problem one might face while trying to switch electric providers:

Oncor [the company that reads electric meters in North Texas] is given a 3-day window to read my electric meter each month. Mine, for example, is read on the 7th, 8th, or 9th day of each month. You never know what day it will be read until it’s actually read.
Gexa Energy just told me (and the PUC confirmed it) that if I switch to Gexa’s 12-month contract next month, Oncor might read my meter on June 9. However, next year, if I switch to a different electric provider and Oncor decides to read my meter on June 7 or June 8, Gexa will hit me with a $150 early-cancellation fee for not fully completing my 12-month contract.
Of course, to play safe, I could postpone my switch next year from June 2010 to July 2010. But in that event, Gexa would switch me to an extremely high month-to-month rate plan for that last month of service.
Or I could pay extra to have my meter read on a specific date.

Seems kind of unfair for a retailer to sock you with the penalty on a technicality. Public Utility Commission spokesman Terry Hadley said it’s true they could do that, but that the PUC encourages customers to file complaints with them and to complain to companies that do that. Some companies have been reasonable, Hadley said, but others …
By sometime in August, however, companies will no longer be able to do this. New retail electric provider disclosure rules that go into effect then require all contracts to include “A statement in bold lettering no smaller than 12 point font that no termination penalty shall apply 14 days prior to the date stated as the expiration date in the notice. No such statement is required if the customer would not be subject to a termination penalty under any circumstances.”
Another change in how electric retailers do business is set to go into effect on Thursday, May 21. Companies must now clear higher financial hurdles in order to be in business, including having at least a $500,000 letter of credit and proof of shareholders’ equity of at least $1 million, according to Hadley. Here’s a link to the PUC documents approving the new rules.
This is an attempt to avoid the problems the state experienced last spring when a handful of smaller retailers went out of business because they either failed to lock in their own costs when natural gas prices went up or they faced huge wholesale liability payments to the state’s grid operator due to a freak spike in wholesale prices.