Thursday, November 16, 2006

Town Hall Meeting with AARP Texas

AARP Texas invited our office to attend their Town Hall Meeting this morning at the Lark Community Center in Mcallen. The subject of the Town Hall Meeting was to discuss and share the retired community's experience with rising electric rates. My job, when attending events like this, is to listen and learn what is on the minds of the public.

There were some common themes that stood out in the stories of some of the individuals who spoke their experience. One theme was that their electric bill seems to be getting higher and higher. Another theme was that they are generally displeased with deregulation because it has had the opposite effect, in their experience, from what was intended. And, finally, they shared some bad experiences when switching electricity providers.

The main concern of most retired persons is making ends meet with their fixed income. I think, to put it more accurately, it is of serious concern when they are on a low fixed income. If one cost of living goes up, they have to allocate that increased cost out of some other budget item. The way it was described to me is that they had to make a choice to feel comfortable, or buy less food, or do without medication. One gentleman in his 70's told me that he has had to limit his use of air conditioning to the evenings so that he can sleep. He only watches TV to catch his favorite stories and then turns it off. One person spoke of how she signed up for the average monthly payment program so that she could budget her money. Somebody failed to explain to her that at the end of a year on the program, there is an adjustment charge to make up any variations in billing. She was charged $2,000. Obviously, when you have to budget your spending, surprises like that can cause serious problems for our retired citizens.

The second common sentiment present amongst the people present at the Town Hall meeting, is that deregulation is not working in Texas. Rather than prices coming down, they keep going up. Some of the retirees who spoke are Winter Texans. Back in their home states, they pay anywhere from 8 to 10 cents per kilowatt hour. Here in Texas, they are paying anywhere from 14 to 16 cents per kilowatt hour, about twice the rate. They agree that electric companies should make a profit; however, they have issues with electric providers making billions. Many of the people present do not see the touted benefits of having deregulation of electricity.

Finally, along the same lines, having the ability to switch has caused a lot of problems for many retirees. What often happens is that competing companies make all kinds of claims about the savings their client will have by switching over. At first, there are some savings; but, eventually, their rates start to creep up. Or, in another variation, if their rates stay the same, they see an increase in other things such as "line charges". One gentleman shared his story how he left the RGV for a month and used no electricity. His company charged him over $100 in fees at 0 kilowatt hours. One lady spoke before the audience to share her experience as an adult day care center manager. She related how many sales people will convince her clients to switch providers failing to explain all the charges or simply confusing them. She spends a great deal of time helping her elderly clients clean up the problems that ensue from switching providers. She expressed frustration that the elderly are targeted and lured with promises of lower rates, only to end up spending more. One last problem that was pointed out was that some companies have rates so low that they go out of business. When this happens, you only have 10 days to choose a new provider before being put on a POLR (Provider of Last Resort). A POLR will often charge outrageous rates in the 20 to 24 cents per kilowatt hour range. There was also some frustration that after switching companies, they were locked in by contract, even when the new company failed to produce true savings.

These are the stories that I heard today. I have to admit that my wife and I never even paid attention to our electricity rate. We simply looked at the dollar amount and paid it. I was surprised to learn how most of the retirees present knew exactly what their rates are. I suppose that being on a fixed income leads to such scrutiny. We checked our rate, tonight. The members of the AARP who spoke are displeased with deregulation and called for some sort of government intervention. They are pragmatic enough, however, that they realize that trying to re-regulate electricity is like "putting the toothpaste back in the tube".

I received a handout with some information that could prove useful.

Power to choose website:
Power scorecard website:
PUC Customer Line: 1 (866) PWR 4 TEX

Shopping Tips
  • Take nothing for granted. Double check the terms of service before agreeing
  • Check the rate, the minimum time the rate must be in effect, penalties, and extra fees charged by the retail electric provider
  • You have 3 days to rescind the agreement. Use this right if you think you may have made a mistake.
  • Be careful signing up with small, start-up companies. Many go out of business and customers end up with POLR (Provider of Last Resort).

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